Oldfields Holdings Limited
and Controlled Entities
52nd Annual Report 2011
ABN 92 000 307 988
OLDFIELDS HOLDINGS LIMITED
AND CONTROLLED ENTITIES
ABN: 92 000 307 988
Financial Report For The Year Ended
30 June 2011
CONTENTS
Directors' Report
Auditor's Independence Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
Additional Information for Listed Public Companies
Corporate Governance Statement
Risk Management Statement
Page
1
7
8
9
10
11
12
44
45
47
48
57
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
DIRECTORS' REPORT
Your directors present their report, together with the financial statements of the Group, being the Company and its controlled entities for the financial year
ended 30 June 2011.
Directors
The names of the directors in office at any time during or since the end of the year are:
Julie Garland McLellan
Appointed
Raymond John Titman
Appointed
Christopher Michael Giles
Appointed
Appointed
William Lewis Timms
Resigned
Anthony Mankarios
Resigned
Christopher C Hext
1 March 2011
23 July 2010
24 September 2010
18 December 2009
23 July 2010
8 July 2011
Principal Activities and Significant Changes in Nature of Activities
The principal activities of the consolidated group during the financial year were:
• manufacturing and marketing of paint brushes, paint rollers, painters tools and spray guns;
• manufacturing, marketing and exporting of Treco garden sheds, outdoor storage systems, aviaries and pet homes;
• manufacturing and marketing of scaffolding and related equipment; and
• hiring of scaffolding and related products to the building and construction industry.
Manufacturing and marketing of cleaning and personal care products ceased during the period as a result of the orderly wind-down of H & O Products Pty
Ltd at 31 October 2010.
Operating Results and Review of Operations for the year
Operating Results
The consolidated group revenue for the financial year ended 30 June 2011 was $30,588,286 and was down 4.5% from the prior year (2010: $32,014,001).
The consolidated net result after tax attributable to members of the parent entity was a loss of $2,834,583 which was a 63% improvement on the prior year
(2010: loss of $7,701,347). This was largely due to the significant amount of one-off non-recurring costs incurred in 2010 which were predominately
associated with the impairment of the consumer products division, H&O Products Pty Ltd, and property devaluations. Further discussion of the Group's
operations during the year now follows:
Review of Operations
(i) Paint Applications Division
Trading conditions were generally difficult for the Paint Applications division in 2011, particularly in the latter half of the year with a wide range of retail
customers reporting low sales for the period. The introduction of new participants in the home improvement sector is expected to provide benefits in 2012.
Trading terms have been renewed with a range of customer groups to provide future growth and stability within this division.
(ii) Treco Garden Sheds Division
The Treco Garden Sheds division was restructured during the year. The distribution network was expanded and the Group's retail alliances were closed.
The division's focus for 2012 will be continued growth of its distribution network, improvement in manufacturing processes and new product innovation.
The high Australian dollar continues to impact on export sales, particularly in the UK.
(iii) Scaffold Division
The Scaffold division management changes over the last two years have brought a renewed focus on quality and customer service. The division
experienced a downturn in the building and construction industry in the latter half of the year. Overall division performance for the year was an
improvement on the prior year result. The division has a strong export base and is focused on developing new relationships in the international market.
Performance of the division's manufacturing operation in China has improved with an emphasis on quality, cost and efficiencies following the appointment
of a new general manager in February 2011.
(iv) PT Ace Oldfields Indonesia
Export sales growth was slower than anticipated, associated with the volatility in the US economy. New opportunities have been identified to develop new
customers and products which are expected to provide benefits to this business in 2012. Local sales continue to increase with new domestic projects
expected to provide additional growth for this business.
(v) Property
A contract for the sale of land and buildings at Archerfield in Queensland was exchanged on 19 April 2011 and was settled on 15 July 2011. A contract for
the sale of land and buildings at St Marys, New South Wales was also exchanged on 7 September 2011 with settlement expected by 30 September 2011.
Consideration from the disposal of these two properties will be used to reduce the overall debt of the Group.
(vi) H & O Consumer Products Division
This discontinued division delivered a negative result for the period. The wind down of this division was completed in October 2010. All finished goods
and assets were sold and all outstanding commitments honoured.
Financial Position
The net assets of the consolidated group have decreased by $469,138 from 30 June 2010 to $2,694,537 at 30 June 2011 . This decrease is largely due to
the following factors:
• inventory impairments of $289,814 relating to the Scaffold division;
• property devaluations of $393,354 relating to the property at St Marys, New South Wales;
• asset and liability reductions associated with the orderly wind-down of H&O Products Pty Ltd and Backyard Installations Pty Ltd;
The directors believe that the group is in a stable financial position and will be able to pay its debts as and when they become due and payable.
1
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
DIRECTORS' REPORT
Significant Changes in State of Affairs
The following significant changes in the state of affairs of the parent entity occurred during the financial year:
(i) On 21 July 2010, the company issued 5,067,308 ordinary shares at $0.17 each to shareholders on the basis of 1 share for every 2 shares held raising
$861,442.
(ii) On 30 November 2010, the company issued 22,980,534 ordinary shares at $0.10 each to shareholders on the basis of 1 share for every 1 share held
raising $2,298,053.
Changes in controlled entities and divisions:
(i) The consumer products division ceased trading during the year as a result of the orderly wind-down of H&O Products Pty Ltd in October 2010.
(ii) The Group disposed of its interest in Tangshan Hengfeng Paint Accessories Co in December 2010, resulting in a net loss of $751,358 during the year.
(iii) Retail alliances in the Treco Sheds division were wound down during the year, contributing a net loss of $839,806 during the year.
Dividends Paid or Recommended
Since the start of the financial year, no dividends have been paid or declared.
Events after the Reporting Period
On 15 July 2011, the contract for sale of the property at Archerfield QLD was settled. Consideration received in relation to this sale was used to reduce the
overall debt of the Group.
On 28 August 2011, the company signed an agreement with its bankers for a finance facility for a further 11 month period.
On 7 September 2011, an unconditional contract for the sale of the property at St Marys NSW was exchanged and is expected to be settled by 30
September 2011. Consideration of $2.2 million will be used to reduce the overall debt of the Group.
There were no other significant events occurring after balance date.
Future Developments, Prospects and Business Strategies
To further improve the consolidated group’s profit and maximise shareholder wealth, the following developments are intended to be implemented in the
near future:
(i) Focus on reduction in overall debt for the Group through the sale of the investment property at St Marys, New South Wales.
(ii) Renewed focus on the Group's core business and customer service to drive marketing and sales.
\
Information on Directors
Julie Garland McLellan
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Directorships held in other listed entities
during the three years prior to the current
year
Raymond John Titman
Experience
Interest in Shares and Options
Special Responsibilities
Christopher Michael Giles
Qualifications
Experience
Interest in Shares and Options
William Lewis Timms
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
Anthony Mankarios
Qualifications
Interest in Shares and Options
Special Responsibilities
Christopher C Hext
Qualifications
Experience
Interest in Shares and Options
Special Responsibilities
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Non-Executive Director and Chair Person (Appointed 1 March 2011)
FAICD, Diploma and Advanced Diploma in Company Directorship, Grad Dip Finance and Investment,
Exec MBA, BSC (hons) Civil Engineering
33 years experience in construction, engineering, and resources industries.
Nil shares held
Chairperson of the Remuneration Committee and Chairperson of the Audit Committee
Bounty Milling Ltd. (Also a director of unlisted entities Kyoto Energy Park, Kimbriki Environmental
Enterprises, Approva Inc. (USA Global Advisory Board), Australian Institute of Company Directors
NSW Council, and Innovation Australia Engineering and Manufacturing Grants Committee)
Executive Director and Chief Executive Officer (Appointed 23 July 2010)
27 years experience with Oldfields in all divisions of the company both domestically and internationally.
43,924 shares held
Member of the Remuneration Committee
Executive Director (Appointed 24 September 2010)
Bachelor of Commerce, CPA
25 years experience in senior financial and general management roles in the fast moving consumer
goods industry
700,000 shares held
Non-Executive Director (Appointed 18 December 2009)
Bachelor of Business (Accounting and Audit), Registered Tax Agent, Real Estate and Business Agent.
25 years experience in accounting and audit, 18 years experience in commercial real estate and
project management.
19,692,264 shares held
Member of the Audit Committee and Member of the Remuneration Committee
Executive Director and Chief Executive Officer (Resigned 23 July 2010)
Fellow of the Australian Institute of Company Directors, Master of Business Administration, Certified
Finance and Treasury Professional.
3,021,090 shares held
Former member of the Remuneration Committee
Non-Executive Director and Chair Person (Resigned 8 July 2011)
Bachelor of Business (Accounting), Registered Tax Agent, Justice of the Peace
Board member since 2001. Mr Hext was a Certified Practicing Accountant and has held senior
accounting and management positions in companies of all sizes.
4,801,228 shares held
Formerly Chairperson of the Remuneration Committee and member of the Audit Committee
2
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
DIRECTORS' REPORT
Company Secretary
The following person held the position of company secretary at the end of the financial year:
Robert A Coleman - Bachelor of Commerce (Accounting), Certified Practicing Accountant. Robert has held various senior management roles in
companies of all sizes.
Meetings of Directors
During the financial year, 14 meetings of directors (including committees of directors) were held.
Attendances by each director during the year were as follows:
Directors' Meetings
Audit
Committee
Number
eligible to
attend
Number
attended
Number
eligible to
attend
Number
attended
Remuneration
Committee
Number
eligible to
attend
Number
attended
4
12
10
12
-
12
4
12
10
12
-
10
1
-
-
2
-
2
1
-
-
2
-
1
-
-
-
-
-
-
-
-
-
-
-
-
Julie Garland McLellan
Raymond John Titman
Christopher Michael Giles
William Lewis Timms
Anthony Mankarios
Christopher C Hext
Indemnifying Officers or Auditor
During or since the end of the financial year, the company has given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay
insurance premiums as follows:
─
The company has paid premiums to insure all past, present and future directors against liabilities for costs and expenses incurred by them in
defending legal proceedings arising out of their conduct while acting in the capacity of director of the company, other than conduct involving a wilful
breach of duty in relation to the company. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.
Options
At the date of this report, the unissued ordinary shares of Oldfields Holdings Limited under option are as follows
Grant Date
24/11/2008
Date of expiry
24/11/2011
Exercise price
$1.20
Number under option
350,000
Options holders do not have any rights to participate in any issues of shares or other interests in the company or any other entity.
There have been no unissued shares or interests under option of any controlled entity within the Group during or since the end of the reporting period.
For details of options issued to directors and executives as remuneration, refer to the Remuneration Report.
Proceedings on Behalf of Company
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party
for the purpose of taking responsibility on behalf of the company for all or any part of those proceedings.
The company was not a party to any such proceedings during the year.
Environmental Issues
The consolidated group’s operations are not subject to significant environmental regulations under the law of the Commonwealth and State. The economic
entity has established a process whereby compliance with existing environmental regulations and new regulations are monitored continually. This process
includes procedures to be followed should an incident adversely impact the environment. The directors are not aware of any significant breaches during
the period covered by this report.
Non-audit Services
The Board of Directors, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services during the year is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the services
disclosed below did not compromise the external auditor’s independence for the following reasons:
• all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure they do not adversely affect the integrity and
objectivity of the auditor; and
• the nature of the services provided does not compromise the general principles relating to auditor independence in accordance with APES 110: Code of
Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The following fees were paid or payable to PKF Chartered Accountants for non-audit services provided during the year ended 30 June 2011:
Taxation services
Due diligence investigations
Auditor’s Independence Declaration
$
7,166
-
7,166
The lead auditor’s independence declaration for the year ended 30 June 2011 has been received and can be found on page 7 of the Annual Report.
3
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
DIRECTORS' REPORT
REMUNERATION REPORT
Remuneration policy
The remuneration policy of Oldfields Holdings Limited has been designed to align key management personnel objectives with shareholder and business
objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the
consolidated group’s financial results. The board of Oldfields Holdings Limited believes the remuneration policy to be appropriate and effective in its ability
to attract and retain the best key management personnel to run and manage the consolidated group, as well as create goal congruence between directors,
executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for key management personnel of the consolidated group is as follows:
• The remuneration policy is required to be developed by the remuneration committee and approved by the Board after seeking professional advice from
independent external consultants.
• All key management personnel receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe
benefits, options and performance incentives.
• The remuneration committee reviews key management personnel packages annually by reference to the consolidated group’s performance, executive
performance and comparable information from industry sectors.
The performance of key management personnel is measured against criteria agreed bi-annually with each executive and is based predominantly on the
forecast growth of the consolidated group’s profits and shareholders’ value. All bonuses and incentives must be linked to predetermined performance
criteria. The Board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to the
committee’s recommendations. Any changes must be justified by reference to measurable performance criteria. The policy is designed to attract the
highest calibre of executives and reward them for performance results leading to long-term growth in shareholder wealth.
Key management personnel receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any
other retirement benefits. Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.
All remuneration paid to key management personnel is valued at the cost to the company and expensed.
The Board's policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The remuneration committee
determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at the Annual General Meeting.
Key management personnel are also entitled and encouraged to participate in the employee share and option arrangements to align directors’ interests
with shareholder interests.
Options granted under the arrangement do not carry dividend or voting rights. Each option is entitled to be converted into one ordinary share once the
interim or final financial report has been disclosed to the public and is valued using the Black-Scholes methodology.
Key management personnel subject to the arrangement are subject to a policy governing the use of external hedging arrangements. Such personnel are
prohibited from entering into hedge arrangements, i.e. put options on unvested shares and options which form part of their remuneration package. Terms
of employment signed by such personnel contain details of such restrictions.
Performance-based Remuneration
The key performance indicators (KPIs) are set annually, with a certain level of consultation with key management personnel. The measures are specifically
tailored to the area each individual is involved in and has a level of control over. The KPIs target areas the Board believes hold greater potential for group
expansion and profit, covering financial and non-financial as well as short and long-term goals. The level set for each KPI is based on budgeted figures for
the Group and respective industry standards.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on the number and deemed difficulty of the KPIs
achieved. Following the assessment, the KPIs are reviewed by the remuneration committee in light of the desired and actual outcomes, and their efficiency
is assessed in relation to the Group’s goals and shareholder wealth, before the KPI’s are set for the following year.
In determining whether or not a KPI has been achieved, Oldfields Holdings Limited bases the assessment on audited figures, however, where the KPI
involves comparison of the Group or a division within the Group to the market, independent reports are obtained.
No performance-based remuneration has been paid during or since the end of the financial year.
Employment Details of Members of Key Management Personnel and Other Executives
The following table provides employment details of persons who were, during the financial year, members of key management personnel of the
consolidated group, and to the extent different, among the five Group executives or company executives receiving the highest remuneration.
Group Key Management Personnel
Julie Garland McLellan
Raymond John Titman
Christopher Michael Giles
William Lewis Timms
Anthony Mankarios
Christopher C Hext
Robert A Coleman
Tracey Grech
Maurice Rivera
Position Held as at 30 June 2011
Non-executive Director
Executive director and Chief Executive Officer
Executive director
Non-executive Director
Executive director and Chief Executive Officer
Non-executive Director
Company Secretary and Chief Financial Officer
Group Financial Controller
General Manager - Scaffold Division
4
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
DIRECTORS' REPORT
Employment Details of Members of Key Management Personnel and Other Executives (continued)
The employment conditions of specified executives are formalised in contracts of employment.
The employment contracts stipulate a range of one to three months notice period on resignation. The Group may terminate an employment contract
without cause by providing a 3-6 months written notice or making payment in lieu based on the individual's annual salary component, together with a
redundancy payment between 5% and 10% of the individual's fixed salary component. Termination payments are generally not payable on resignation or
dismissal for serious misconduct.
In the instance of serious misconduct, the Group can terminate the individual's employment contract at any time. Any
options not exercised before that date will lapse.
Changes in Directors and Executives
On 8 July 2011, Christopher C Hext retired as a Director.
On 1 March 2011, Julie Garland McLellan commenced as a Director.
On 24 September 2010, Christopher Michael Giles commenced as a Director.
On 23 July 2010, Raymond John Titman commenced as a Director.
On 23 July 2010, Anthony Mankarios resigned as a Director.
Remuneration Details for the Year Ended 30 June 2011
The following table of payments and benefits details, in respect to the financial year, the components of remuneration for each member of the key
management personnel for the consolidated group and, to the extent different, the five group executives and five company executives receiving the highest
remuneration:
Table of Benefits and Payments for the year ended 30 June 2011
Short-term benefits
Salary, Fees and
Leave
$
Non-monetary
$
Post
Employment
Benefits
Pension and
superannuation
$
Termination
benefits
$
Total
$
26,250
164,331
163,375
50,190
9,961
79,733
160,000
82,000
99,302
835,142
-
20,337
4,530
-
7,787
-
15,290
9,613
11,997
69,554
2,917
14,580
14,400
4,517
4,592
7,176
14,400
7,380
8,370
78,332
-
-
-
-
91,060
-
-
-
-
91,060
29,166
199,248
182,305
54,708
113,400
86,909
189,690
98,993
119,669
1,074,088
Short-term benefits
Salary, Fees and
Leave
$
Non-monetary
$
Post
Employment
Benefits
Pension and
superannuation
$
Equity-settled
share-based
payments
Options/Rights
$
Total
$
94,462
7,412
177,833
45,119
55,179
66,918
96,005
43,735
149,154
17,181
22,815
8,428
784,241
31,159
-
34,186
-
6,604
30,017
22,059
3,585
27,203
-
13,891
-
168,704
8,502
667
16,005
4,061
4,966
-
8,640
3,936
13,424
-
2,053
758
63,012
4,050
-
13,500
1,350
-
1,350
1,350
-
-
-
-
-
21,600
138,173
8,079
241,524
50,530
66,749
98,285
128,054
51,256
189,781
17,181
38,759
9,186
1,037,557
2011
Group Key Management
Personnel
Julie Garland McLellan
Raymond John Titman
Christopher Michael Giles
William Lewis Timms
Anthony Mankarios
Christopher C Hext
Robert A Coleman
Tracey Grech
Maurice Rivera
2010
Group Key Management
Personnel
Raymond John Titman
William Lewis Timms
Anthony Mankarios
Christopher C Hext
Robert A Coleman
Kenneth E Holloway
Gary J Guild
Maurice W Abbott
Braden Murrin
Thomas D Love
John Roy Westwood
Michael Leo Stafford
Securities Received that are not Performance Related
No members of key management personnel are entitled to receive securities which are not performance-based as part of their remuneration package.
Options and Rights Granted
There have been no options or rights granted to key management personnel during the financial year.
5
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988 AND CONTROLLED ENTITIES
DIRECTORS' REPORT
This Directors’ Report, incorporating the Remuneration Report, is signed in accordance with a resolution of the Board of Directors.
Raymond John Titman
Dated:
20/09/2011
6
Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001
I declare to the best of my knowledge and belief, in relation to the audit for the financial year ended 30
June 2011 there have been:
• no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
• no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Oldfields Holdings Limited and the entities it controlled during the year.
PKF
Paul Bull
Partner
20 September 2011
Sydney
Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au
PKF | ABN 83 236 985 726
Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia
The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the
PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast
Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2011
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Impairment expenses
Loss on remeasurement of equity investment due to business
combination
Loss on revaluation of investment property
Finance costs
Share of net profits of associates
Loss before income tax
Income tax benefit (expense)
Loss from continuing operations
Loss for the year from discontinued operations after tax
Loss for the year
Note
3
3
4
5
6
Consolidated Group
2011
2010
$
$
30,588,286
32,014,001
(15,506,894) (18,003,042)
14,010,959
15,081,392
988,471
857,612
(9,868,686) (12,201,412)
(727,840)
(863,708)
(2,639,492)
(376,059)
(597,647)
(1,511,722)
(3,395,163)
(77,596)
-
(393,354)
(1,732,939)
263,266
(1,374,837)
(618,514)
(1,993,351)
(1,027,692)
(3,021,043)
(516,000)
(812,553)
(1,615,913)
136,214
(4,617,333)
(155,705)
(4,773,038)
(3,877,210)
(8,650,248)
Other comprehensive income:
Net loss on revaluation of land and buildings
Net change in fair value of cash flow hedge
Exchange differences on translating foreign controlled entities
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
5d
5d
(68,705)
(21,172)
(431,481)
(521,358)
(3,542,401)
(112,206)
70,053
296,480
254,327
(8,395,921)
Loss attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive income attributable to:
Members of the parent entity
Non-controlling interest
Earnings per share
Overall Operations
Basic earnings per share (cents)
Diluted earnings per share (cents)
Continuing Operations
Basic earnings per share (cents)
Diluted earnings per share (cents)
Discontinued Operations
Basic earnings/(loss) per share (cents)
(2,834,583)
(186,460)
(3,021,043)
(7,701,346)
(948,902)
(8,650,248)
(3,355,941)
(186,460)
(3,542,401)
(7,447,019)
(948,902)
(8,395,921)
10
10
10
10
10
(6.14)
(6.14)
(35.94)
(35.94)
(3.91)
(3.91)
(17.85)
(17.85)
(2.22)
(18.10)
The accompanying notes form part of these financial statements.
8
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2011
Note
Consolidated Group
2011
2010
$
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Derivatives
Other assets
Non-current assets held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investments accounted for using the equity method
Property, plant and equipment
Investment property
Deferred tax assets
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Current tax liabilities
Short-term provisions
Derivatives
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Deferred tax liabilities
Other long-term provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
Parent interest
Non-controlling interest
TOTAL EQUITY
11
12
13
14
16
15
17
20
21
25
22
23
24
25
26
14
24
25
26
27
36
757,753
4,303,972
5,122,274
-
2,107,940
12,291,939
2,199,396
14,491,335
316,776
6,437,921
6,272,925
9,241
480,631
13,517,494
-
13,517,494
1,491,089
9,656,244
-
35,330
1,119,989
12,302,652
26,793,987
2,712,355
13,006,389
2,205,320
61,031
1,202,811
19,187,906
32,705,400
5,015,273
17,573,392
83,513
985,191
11,931
23,669,300
6,652,925
19,266,829
97,934
1,151,847
-
27,169,535
364,538
359
65,253
430,150
24,099,450
2,694,537
2,224,843
-
147,347
2,372,190
29,541,725
3,163,675
18,751,301
(1,009,733)
(13,529,156)
4,212,412
(1,517,875)
2,694,537
15,657,109
(1,105,124)
(10,077,824)
4,474,161
(1,310,486)
3,163,675
The accompanying notes form part of these financial statements.
9
Consolidated Group
Balance at 1 July 2009
Loss attributable to members of parent entity
Loss attributable to non-controlling interests
Total other comprehensive income for the year
Transfers from foreign exchange reserve to retained earnings
Revaluation increment
Transactions with owners, in their capacity as owners:
Shares issued during the year
Transaction costs
Subtotal
Dividends paid by controlled entities to non-controlling interests
Balance at 30 June 2010
Balance at 1 July 2010
Loss attributable to members of parent entity
Loss attributable to non-controlling interests
Total other comprehensive income for the year
Transfers from foreign exchange reserve to retained earnings
Revaluation decrement
Adjustments to opening non-controlling interests
Transactions with owners, in their capacity as owners:
Shares issued during the year
Transaction costs
Subtotal
Dividends paid by controlled entities to non-controlling interests
Balance at 30 June 2011
The accompanying notes form part of these financial statements.
8
8
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2011
Note
Issued
Capital
Retained
Earnings
Cash Flow
Hedge
Reserve
Asset
Revaluation
Reserve
$
$
$
$
Foreign
Currency
Translation
Reserve
$
Option
Reserve
Non-
controlling
interests
Total
$
$
$
12,141,959
(2,806,425)
(60,812)
180,911
(1,191,829)
112,777
(189,084)
-
-
-
-
-
(7,701,346)
-
-
429,947
-
-
-
70,053
-
-
-
-
(112,206)
-
-
-
-
296,480
(429,947)
-
-
-
-
-
29,449
-
(948,902)
-
-
-
8,187,497
-
(7,701,346)
(948,902)
254,327
-
29,449
3,656,524
(141,374)
15,657,109
-
15,657,109
-
-
(10,077,824)
-
(10,077,824)
-
-
9,241
-
9,241
-
-
68,705
-
68,705
-
-
(1,325,296)
-
(1,325,296)
-
-
142,226
-
142,226
-
-
(1,137,986)
(172,500)
(1,310,486)
3,656,524
(141,374)
3,336,175
(172,500)
3,163,675
15,657,109
(10,077,824)
9,241
68,705
(1,325,296)
142,226
(1,310,486)
-
-
(68,705)
-
-
-
-
(431,481)
758,975
-
-
-
-
-
(142,226)
-
(186,460)
-
-
-
(20,929)
3,163,675
-
(2,834,583)
(186,460)
(521,358)
-
-
(20,929)
-
-
-
-
-
-
-
(997,802)
-
(997,802)
-
-
-
-
-
-
-
(1,517,875)
-
(1,517,875)
3,159,496
(65,304)
2,694,537
-
2,694,537
-
-
-
-
-
(2,834,583)
-
-
(758,975)
142,226
3,159,496
(65,304)
18,751,301
-
18,751,301
-
-
(13,529,156)
-
(13,529,156)
-
-
(21,172)
-
-
-
-
(11,931)
-
(11,931)
10
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2011
Note
Consolidated Group
2011
2010
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Interest received
Rent received
Payments to suppliers and employees
Finance costs
Income tax paid
Interest paid on Director's Loan
Net cash provided by/(used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments in associates
Proceeds from disposal of subsidiary
Purchase of property, plant and equipment
Payment for businesses acquired
Payment for shares issued by associates
Net cash provided by/(used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Overdraft restructure to borrowings
Repayment of borrowings
Dividends paid by controlled entities to non-controlling interests
Net cash provided by/(used in) financing activities
Net increase(decrease) in cash held
Cash and cash equivalents at beginning of financial year
Cash and cash equivalents at end of financial year
The accompanying notes form part of these financial statements.
33,516,626
184
234,250
41,158,121
81,212
512,838
(33,183,030) (40,588,016)
(1,613,298)
(464,902)
(70,331)
(984,376)
(1,461,142)
(269,588)
(3,333)
(1,166,033)
31a
1,787,967
1,054,138
-
(1,376,183)
(45,760)
(231,920)
1,188,242
2,302,630
-
174,050
(1,353,409)
(693,498)
(305,372)
124,401
3,094,192
364,634
1,000,000
(1,888,960)
-
2,569,866
2,592,075
(2,160,666)
431,409
2,081,470
110,503
-
(2,366,285)
(172,500)
(346,812)
(1,206,787)
(953,879)
(2,160,666)
11
11
11
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
These consolidated financial statements and notes represent those of Oldfields Holdings Limited and Controlled Entities (the “consolidated group” or
“Group”). The separate financial statements of the parent entity, Oldfields Holdings Limited, have been presented within this financial report in note 2.
Note 1
Summary of Significant Accounting Policies
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (including Australian
Accounting Interpretations), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and
reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the preparation of the
financial statements are presented below and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial liabilities.
The financial report was authorised for issue on 20 September 2011 by the directors of the Group.
Going Concern
The Group made a loss for the year ended 30 June 2011 of $3,021,043 (2010: $8,650,248) and had a net cash outflow from operating activities of
The Group has also reported a net current asset deficiency of $9,177,965 (2010: $13,652,041) which is due to the
$1,166,033 (2010: $984,376).
classification of bank loans as current in accordance with the requirements of AASB101 Presentation of Financial Statements (refer note 24). These
conditions give rise to material uncertainty which may cast doubt over the Group's ability to continue as a going concern.
Notwithstanding the above, the directors' believe that the Group will continue to operate as a going concern for the following reasons:
(cid:121) Negotiations to renew the finance facility commenced in June 2011 and hence the debts under the previous facility, which expired on 31 July 2011,
became current at the end of the financial year. A new facility agreement was re-negotiated with the Group's bankers on 28 August 2011 for a period until
31 July 2012;
(cid:121) Treco Garden Sheds division has been restructured to reduce fixed costs and overheads, providing ongoing savings;
(cid:121) The sale of the property held at Archerfield, Queensland was settled on 15 July 2011 and a contract for the sale of the property held at St Marys, New
South Wales was exchanged on 7 September 2011 with settlement expected by 30 September 2011. The consideration from the sale of these properties
will be used to reduce Group debt and ongoing finance costs;
(cid:121) The Paint Applications division has secured a major new customer and is expected to benefit from changes in the hardware market in Australia in the
coming twelve months;
(cid:121) Redundancy and restructuring costs incurred during the financial year are not expected to recur;
(cid:121) The Group's debts are being paid as and when they fall due; and
(cid:121) Cash and cash equivalents at the end of the financial year increased by $2,592,075 compared to the prior year.
Should the Group be unable to continue as a going concern it may be required to realise its assets and discharge its liabilities other than in the normal
course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the company be unable to continue as a
going concern and meet its debts as and when they fall due.
(a)
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Oldfields Holdings Limited at the end of the
reporting period. A controlled entity is any entity over which Oldfields Holdings Limited has the ability and right to govern the financial and operating
policies so as to obtain benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period of
the year that they were controlled. A list of controlled entities is contained in Note 19 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the Consolidated Group have been
eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the Equity
section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets
comprise their interests at the date of the original business combination and their share of changes in equity since that date.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common
control. The business combination will be accounted for from the date that control is attained whereby the fair value of the identifiable assets acquired
and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration
arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
12
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(a)
Principals of Consolidation (continued)
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred;
(ii) any non-controlling interest; and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held
equity interest shall form the cost of the investment in the separate financial statements.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such
equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss.
Included in the measurement of consideration transferred is any asset or liability resulting from a contingent consideration arrangement. Subsequent to
initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
Contingent consideration classified as an asset or a liability is remeasured each reporting period to fair value through the statement of comprehensive
income unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method
adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-controlling interest in the acquiree
either at fair value (full goodwill method) or at the non-controlling interest's proportionate share of the subsidiary's identifiable net assets (proportionate
interest method). In such circumstances, the Group determines which method to adopt for each acquisition and this is stated in the respective notes to
these financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest is determined using valuation techniques which make the maximum use of
market information where available. Under this method, goodwill attributable to the non-controlling interests is recognised in the consolidated financial
statements.
Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Group's cash generating units or groups of cash generating units, representing the
lowest level at which goodwill is monitored not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying
amount of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the carrying values of goodwill.
Discontinued Operations
A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for sale and that represents a
separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of
operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of
the statement of comprehensive income.
(b)
Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates
allowed. When the inflow of consideration is deferred it is treated as the provision of financing and is discounted at a rate of interest that is generally
accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest
revenue.
Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership
of the goods and the cessation of all involvement in those goods.
Interest revenue is recognised using the effective interest rate method.
Dividend revenue is recognised when the right to receive a dividend has been established. Dividends received from associates and joint venture
entities are accounted for in accordance with the equity method of accounting.
Revenue recognition relating to the provision of services is determined with reference to the stage of completion of the transaction at the end of the
reporting period where the outcome of the contract can be estimated reliably. Stage of completion is determined with reference to the services
performed to date as a percentage of total anticipated services to be performed. Where the outcome cannot be estimated reliably, revenue is
recognised only to the extent that related expenditure is recoverable.
Investment property revenue is recognised on a straight-line basis over the period of the lease term so as to reflect a constant periodic rate of return
on the net investment.
All revenue is stated net of the amount of goods and services tax (GST).
(c)
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to prepare
for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the income statement in the period in which they are incurred.
13
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(d)
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income measured at the amounts expected to be paid to
(recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to items that are recognised
outside profit or loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is
settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and
liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will
occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable
right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Tax Consolidation
Oldfields Holdings Limited and its wholly-owned subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each
entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the 'stand-alone taxpayer'
approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are
immediately transferred to the head entity.
The Group notified the Australian Taxation Office that it had formed an income tax consolidated group to apply from 1 July 2003. The tax consolidated
group has entered a tax funding arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to
their contribution to the Group's taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts
recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution to the head entity.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities in
the statement of financial position.
Trade and other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any
provision for impairment. Trade receivables are generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying
amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the consolidated entity will not be able
to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will
enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days overdue) are considered indicators that the
trade receivable may be impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted
if the effect of discounting is immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes direct materials, direct labour and
an appropriate portion of variable and fixed overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the
basis of weighted average costs.
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use. They are measured at the lower of their carrying amount and fair value less costs to sell. For non-
current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their present condition and
their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair value less
costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of a non-current assets and assets of disposal groups,
but not in excess of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities
of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face of the
statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the
statement of financial position, in current liabilities.
14
(e)
(f)
(g)
(h)
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(i)
Investments in Associates
Associates are companies in which the Group has significant influence through holding, directly or indirectly, 20% or more of the voting power of the
Group. Investments in associates are accounted for in the financial statements by applying the equity method of accounting, whereby the investment is
initially recognised at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate company. In
addition, the Group’s share of the profit or loss of the associate company is included in the Group’s profit or loss.
The carrying amount of the investment includes goodwill relating to the associate. Any discount on acquisition whereby the Group’s share of the net
fair value of the associate exceeds the cost of investment is recognised in profit or loss in the period in which the investment is acquired.
Profits and losses resulting from transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the
associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group discontinues recognising its share of
further losses unless it has incurred legal or constructive obligations or made payments on behalf of the associate. When the associate subsequently
makes profits, the Group will resume recognising its share of those profits once its share of the profits equals the share of the losses not recognised.
Details of the Group’s investment in associates are shown at Note 18.
(j)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and
impairment losses.
Property
Freehold land and buildings are recorded at their fair value (being the amount for which an asset could be exchanged between knowledgeable willing
parties in an arm's length transaction), based on periodic, but at least triennial, valuations by external
less accumulated
depreciation for buildings.
independent valuers,
Increases in the carrying amount arising on revaluation of land and buildings are credited to a revaluation surplus in equity. Decreases that offset
previous increases of the same asset are charged against fair value reserves directly in equity; all other decreases are charged to the statement of
comprehensive income. Each year the difference between depreciation based on the revalued carrying amount of the asset charged to the statement
of comprehensive income and depreciation based on the asset’s original cost is transferred from the revaluation reserve to retained earnings.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to
the revalued amount of the asset.
Plant and Equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment.
In
the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down
immediately to the estimated recoverable amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the
impairment losses relate to a revalued asset. A formal assessment of the recoverable amount is made when impairment indicators are present (refer
to Note 1(q) for details of impairment).
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these
assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset's employment and
subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and an appropriate
proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the statement of comprehensive income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but excluding freehold land, is depreciated on a straight-
line basis over the asset's useful life to the consolidated group commencing from the time the asset is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Buildings
Leasehold improvements
Plant and equipment
Motor vehicles
Depreciation Rate
2%
4 - 5%
5 - 50%
18 - 20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement
of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to
retained earnings.
(k)
Investment Property
Investment properties are held to generate long-term rental yields. All tenant leases are on an arm's length basis. Investment properties are carried at
fair value, determined annually. Changes to fair value are recorded in the income statement as other income.
15
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(l)
Other Intangibles
Patents and Trademarks
Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated
amortisation and any impairment losses. Patents and trademarks are amortised over their useful life ranging from 5 to 10 years.
Research and Development
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical
feasibility studies identify that the project is expected to deliver future economic benefits and these benefits can be measured reliably.
Development costs have a finite life and are amortised on a systematic basis based on the future economic benefits over the useful life of the project.
(m)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of
economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(n)
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to the end of the reporting period.
Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled.
Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those
benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy vesting
requirements. Those cashflows are discounted using market yields on national government bonds with terms to maturity that match the expected
timing of cashflows.
(o)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured
at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, the loans or borrowings are
classified as non-current.
(p)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that is
transferred to entities in the consolidated group, are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the
present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the
lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in
which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.
\
(q)
Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial
assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified ‘at fair value through profit or
loss’ in which case transaction costs are expensed to profit or loss immediately.
Classification and Subsequent Measurement
Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any
reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated
using the effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all
unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that
discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or
when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial
liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income
or expense in profit or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting
standards specifically applicable to financial instruments.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of short-term profit taking,
derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance
evaluation where a Group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented
risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in
the profit or loss.
16
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(p)
Financial Instruments (continued)
(ii)
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are
subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period.
(iii)
Held-to-maturity Investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the
Group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets where they are expected to mature more than 12 months after the end of the
reporting period. All other investments are classified as current assets.
(iv)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial
assets due to their nature, or they are designated as such by management. They comprise investments in the equity of other entities where there
is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (i.e. gains or losses) recognised in other comprehensive income
(except for impairment losses and foreign exchange gains and losses). When the financial asset is derecognised, the cumulative gain or loss
pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold more than 12 months after the end of
the reporting period. All other financial assets are classified as current assets.
(v)
Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Derivative Instruments
The Group designates certain derivatives as either:
(i)
(ii)
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
hedges of highly probable forecast transactions (cash flow hedges).
At the inception of the transaction the relationship between hedging instruments and hedged items, as well as the group's risk management objective
and strategy for undertaking various hedge transactions is documented.
Assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will
continue to be highly effective in offsetting changes in fair values or cash flows of hedged items are also documented.
(i)
(ii)
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the statement of comprehensive
income, together with any changes in the fair value of hedged assets or liabilities that are attributable to the hedged risk.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is deferred to a hedge
reserve in equity. The gain or loss relating to the ineffective portion is recognised immediately in the statement of comprehensive income.
Amounts accumulated in the hedge reserve in equity are transferred to the income statement in the periods when the hedged item will affect profit or
loss.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. In the case
of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether an impairment has
arisen. Impairment losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in other comprehensive
income is reclassified to profit or loss at this point.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the
entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised
liability
where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is
recognised in the profit or loss.
the financial
(q)
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include
the consideration of external and internal sources of information including dividends received from subsidiaries, associates or jointly controlled entities
deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the
asset’s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in
accordance with another Standard (e.g. in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as
a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
17
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(r)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic environment in which that entity
operates. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values
were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash
flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other comprehensive income to the extent that the
underlying gain or loss is recognised in other comprehensive income, otherwise the exchange difference is recognised in the profit or loss.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the group’s presentation currency are translated as
follows:
—
—
—
assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other
comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised
in the profit or loss in the period in which the operation is disposed.
(s)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the
Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to,
the ATO is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable
from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.
(t)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
Where the Group has retrospectively applied an accounting policy, made a retrospective restatement of
items in the financial statements or
reclassified items in its financial statements, an additional statement of financial position as at the beginning of the earliest comparative period will be
disclosed. Refer to Note 37
(u)
Critical Accounting Estimates and Judgments
Management evaluates estimates and judgments incorporated into the financial report based on historical knowledge and best reasonably available
current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both
externally and within the group.
Key Estimates and Judgements
(i) Impairment
The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group that may be indicative
of impairment triggers. Recoverable amounts of relevant assets are reassessed using value-in-use calculations which incorporate various key
assumptions.
(ii) Provision for Impairment of Receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking
into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtors financial
position.
(iii) Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by
taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.
(iv) Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment
and definite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation
and amortisation charge will increase where the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets
that have been abandoned or sold will be written off or written down.
(v)
New, Revised or Amending Accounting Standards and Interpretations Adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and Interpretations are
disclosed in the relevant accounting policy.
18
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(v)
New, Revised or Amending Accounting Standards and Interpretations Adopted (continued)
The adoption of these Accounting Standards and Interpretations did not have any impact on the financial performance or position of the consolidated
entity. The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 2 Share-based Payment Transactions - amendments for Group Cash-settled Share-based Payment Transactions
The consolidated entity has applied the amendments to AASB 2 from 1 July 2010. The amendments clarified the scope of AASB 2 by requiring an
entity that receives goods or services in a share-based payment arrangement to account for those goods or services no matter which entity in the
consolidated entity settles the transaction, and no matter whether the transaction is settled in shares or cash.
Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments
The consolidated entity has applied Interpretation 19 from 1 July 2010. The interpretation clarified that equity instruments issued to a creditor to
extinguish a financial liability qualifies as consideration paid. The equity instruments issued are measured at their fair value, or if not reliably measured,
at the fair value of the liability extinguished, with any gain or loss recognised in profit or loss.
AASB 2009-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Project
The consolidated entity has applied AASB 2009-5 amendments from 1 July 2010. The amendments result
in some accounting changes for
presentation, recognition or measurement purposes, while some amendments that relate to terminology and editorial changes had no or minimal effect
on accounting. The main changes were:
AASB 101 'Presentation of Financial Statements' - classification is not affected by the terms of a liability that could be settled by the issuance of equity
instruments at the option of the counterparty;
AASB 107 'Statement of Cash Flows' - only expenditure that results in a recognised asset can be classified as a cash flow from investing activities;
AASB 117 'Leases' - removal of specific guidance on classifying land as a lease;
AASB 118 'Revenue' - provides additional guidance to determine whether an entity is acting as a principal or agent; and
AASB 136 'Impairment of Assets' - clarifies that the largest unit permitted for allocating goodwill, acquired in a business combination, is the operating
segment as defined in AASB 8 'Operating Segments' before aggregation for reporting purposes.
AASB 2009-10 Amendments to AASB 132 - Classification of Rights Issues
The consolidated entity has applied AASB 2009-10 from 1 July 2010. The amendments clarified that rights, options or warrants to acquire a fixed
number of an entity's own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants
pro-rata to all existing owners of the same class of its own non-derivative equity instruments. The amendment therefore provides relief to entities that
issue rights in a currency other than their functional currency from treating the rights as derivatives with fair value changes recorded in profit or loss.
AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project
The consolidated entity has applied AASB 2010-3 amendments from 1 July 2010. The amendments result
in some accounting changes for
presentation, recognition or measurement purposes, while some amendments that relate to terminology and editorial changes had no or minimal effect
on accounting. The main changes were:
AASB 127 'Consolidated and Separate Financial Statements' and AASB 3 'Business Combinations' - clarifies that contingent consideration from a
business combination that occurred before the effective date of revised AASB 3 is not restated; the scope of the measurement choices of non-
controlling interest is limited to when the rights acquired include entitlement to a proportionate share of net assets in the event of liquidation; requires
an entity in a business combination to account for the replacement of acquiree's share-based payment transactions, unreplaced and voluntarily
replaced, by splitting between consideration and post combination expenses.
(w) New Accounting Standards for Application in Future Periods
The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods
and which the Group has decided not to early adopt. A discussion of those future requirements and their impact on the Group is as follows:
—
AASB 9: Financial Instruments [December 2010] (applicable for annual reporting periods commencing on or after 1 January 2013).
This Standard is applicable retrospectively and includes revised requirements for the classification and measurement of financial instruments, as
well as recognition and derecognition requirements for financial instruments . The Group has not yet determined any potential impact on the
financial statements.
The key changes made to accounting requirements include:
─
─
─
─
─
─
─
simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;
allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for
trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in
profit or loss and there is no impairment or recycling on disposal of the instrument;
requiring financial assets to be reclassified where there is a change in an entity’s business model as they are initially classified based on:
(a) the objective of the entity’s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows;
requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to
changes in the entity’s own credit risk in the other comprehensive income, except when that would create an accounting mismatch. If such
a mismatch would be created or enlarged, the entity is required present all changes in fair value (including the effects of changes in the
credit risk of the liability) in profit or loss.
—
AASB 2010-6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] (applicable
for annual reporting periods beginning on or after 1 July 2011).
This Standard adds and amends disclosure requirements about transfers of financial assets, especially those in respect of the nature of the
financial assets involved and the risks associated with them. Accordingly, this standard makes amendments to AASB 1: First-time Adoption of
Australian Accounting Standards; and AASB 7: Financial Instruments: Disclosures; establishing additional disclosure requirements in relation to
transfers of financial assets.
19
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 1
Summary of Significant Accounting Policies (continued)
(w) New Accounting Standards for Application in Future Periods (continued)
—
—
—
—
—
—
—
AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011).
This Standard removes the requirement for government-related entities to disclose details of all transactions with the government and other
government-related entities and clarifies the definition of a ‘related party’ to remove inconsistencies and simplify the structure of the Standard. No
changes are expected to materially affect the Group.
This Standard is not expected to impact the Group.
AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2: Amendments to Australian Accounting Standards arising
from Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108, 110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131,
133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129 & 1052] (applicable for annual reporting periods
commencing on or after 1 July 2013)
AASB 1053 establishes a revised differential financial reporting framework consisting of two tiers of financial reporting requirements for those
entities preparing general purpose financial statements:
Tier 1: Australian Accounting Standards; and
Tier 2: Australian Accounting Standards - Reduced Disclosure Requirements.
–
–
Tier 2 of the framework comprises the recognition, measurement and presentation requirements of Tier 1, but contains significantly fewer
disclosure requirements.
The following entities are required to apply Tier 1 reporting requirements (i.e. full IFRS):
–
–
for-profit private sector entities that have public accountability; and
the Australian Government and state, territory and local governments.
Since the Group is a for-profit private sector entity that has public accountability, it does not qualify for the reduced disclosure requirements for
Tier 2 entities.
AASB 2010-2 makes amendments to Australian Accounting Standards and Interpretations to give effect to the reduced disclosure requirements
for Tier 2 entities.
It achieves this by specifying the disclosure paragraphs that a Tier 2 entity need not comply with as well as adding specific
‘RDR’ disclosures.
AASB 2009–12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and
Interpretations 2, 4, 16, 1039 & 1052] (applicable for annual reporting periods commencing on or after 1 January 2011).
This Standard makes a number of editorial amendments to a range of Australian Accounting Standards and Interpretations,
including
amendments to reflect changes made to the text of IFRSs by the IASB. The Standard also amends AASB 8 to require entities to exercise
judgment in assessing whether a government and entities known to be under the control of that government are considered a single customer for
the purposes of certain operating segment disclosures. The amendments are not expected to impact the Group.
AASB 2010-5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140,
1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual reporting periods beginning on or after 1 January 2011).
This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments
to reflect changes made to the text of IFRSs by the IASB. However, these editorial amendments have no major impact on the requirements of
the respective amended pronouncements.
AASB 2010-4: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7,
AASB 101 & AASB 134 and Interpretation 13] (applicable for annual reporting periods commencing on or after 1 January 2011)
This standard details numerous non-urgent but necessary changes to accounting standards arising from the IASB’s annual
project. Key changes include:
improvements
–
–
–
–
–
clarifying the application of AASB 108 prior to an entity’s first Australian Accounting Standard financial statements;
adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of the quantitative disclosures to better
enable users to evaluate an entity’s exposure to risks arising from financial instruments;
amending AASB 101 to the effect that disaggregation of changes in each component of equity arising from transactions recognised in other
comprehensive income is required to be presented, but is permitted to be presented in the statement of changes in equity or in the notes;
adding a number of examples to the list of events or transactions that require disclosure under AASB 134; and
making sundry editorial amendments to various Standards and Interpretations.
This Standard is not expected to impact the Group.
AASB 2010-7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)
[AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 &
127] (applies to periods beginning on or after 1 January 2013).
This standard makes amendments to a range of Australian Accounting Standards and Interpretations as a consequence of the issuance of
AASB 9: Financial Instruments in December 2010. Accordingly, these amendments will only apply when the entity adopts AASB 9.
This Standard is not expected to impact the Group.
AASB 2010-8: Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets [AASB 112] (applies to periods
beginning on or after 1 January 2012).
This Standard makes amendments to AASB 112: Income Taxes.
The amendments brought in by this Standard introduce a more practical approach for measuring deferred tax liabilities and deferred tax assets
when investment property is measured using the fair value model under AASB 140: Investment Property.
Under the current AASB 112, the measurement of deferred tax liabilities and deferred tax assets depends on whether an entity expects to
recover an asset by using it or by selling it. The amendments introduce a presumption that an investment property is recovered entirely through
sale. This presumption is rebutted if the investment property is held within a business model whose objective is to consume substantially all of
the economic benefits embodied in the investment property over time, rather than through sale.
The amendments brought in by this Standard also incorporate Interpretation 121 into AASB 112. The amendments are not expected to impact
the Group.
20
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 2
Parent Information
The following information has been extracted from the books and records of the parent and has been prepared in accordance with the Accounting
Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
TOTAL LIABILITIES
EQUITY
Issued Capital
Retained earnings
Asset revaluation reserve
Cash flow hedge reserve
TOTAL EQUITY
STATEMENT OF COMPREHENSIVE INCOME
Total loss before tax
Total comprehensive income
2011
$
2010
$
10,277,758
12,946,227
9,693,276
11,735,257
631,345
631,345
696,914
931,714
18,751,301
(6,424,488)
-
(11,931)
12,314,882
15,657,109
(5,005,033)
142,226
9,241
10,803,543
(2,143,066)
(3,205,442)
(1,582,852)
(3,109,596)
Guarantees
The parent entity has not entered into any guarantees on behalf of the Group or any individual entity within the Group as at 30 June 2011 or 30 June 2010.
Contingent liabilities
The parent entity did not have any contingent liabilities as at 30 June 2011 or 30 June 2010.
Contractual commitments
The parent entity did not have any contractual commitments as at 30 June 2011 or 30 June 2010.
Note 3
Revenue and Other Income
Sales revenue
—
—
sale of goods
rental revenue of scaffold equipment
Total revenue
Other income
—
—
—
—
—
—
—
gain on disposal of property, plant and equipment
gains on disposal of non-current investments
investment loan write back
rental revenue for property investment
interest received
export market development grant
other income
Total other income
Interest revenue from:
—
other persons
Total interest revenue
Consolidated Group
2011
2010
$
$
17,687,475
12,900,811
30,588,286
17,903,302
14,110,699
32,014,001
37,647
-
223,081
206,140
174
36,449
354,121
857,612
71,414
82,008
-
265,002
81,207
-
488,840
988,471
174
174
81,207
81,207
21
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note
Consolidated Group
Note 4
Loss for the Year
Loss before income tax from continuing operations includes the following
specific expenses:
Expenses
Cost of sales
Interest expense:
—
—
—
—
Directors
Associated companies
Other related parties
Other persons
Total interest expense
Foreign currency translation losses
Impairment of goodwill
Impairment of assets
Bad and doubtful debts:
trade receivables
Total bad and doubtful debts
Rental expense on operating leases
minimum lease payments
—
—
34
Loss on remeasurement of equity investment due to business combination
Loss on revaluation of investment property
Expenses on investment properties
—
—
Direct operating expenses from property that generated rental income
Direct operating expenses from property that did not generate rental income
Total expenses on investment properties
Note 5
Income Tax Expense
(a)
The components of tax expense comprise:
Current tax
Deferred tax
Deferred tax assets not recognised during the year
Recoupment of prior year tax losses
Note
25
(b)
The prima facie tax on profit from ordinary activities before income tax is reconciled
to the income tax as follows:
Prima facie tax payable on profit from ordinary activities before income tax at 30%
(2010: 30%)
Add tax effect of:
—
—
—
—
non-deductible depreciation and amortisation
other non-allowable items
under provision for income tax in prior year
capital loss on disposal of investment in associate
Less tax effect of:
—
—
—
—
share of net profits of associates and joint venture entities netted directly
net tax effect profit/(loss) from overseas operations
current year deferred tax assets not recognised
capital costs creating new deferred tax assets
Recoupment of prior year tax losses not previously brought to account
Income tax attributable to entity
2011
$
2010
$
15,506,894
18,003,042
-
2,295
58,500
1,672,144
1,732,939
47,661
-
77,596
70,331
43,421
-
1,502,161
1,615,913
10,180
107,679
268,380
(74,148)
(74,148)
385,891
385,891
1,312,841
-
393,354
1,751,309
516,000
812,553
47,729
70,754
118,483
50,003
12,598
62,601
Consolidated Group
2011
2010
$
$
(312,894)
(25,342)
1,039,941
(83,191)
618,514
(1,247,660)
35,689
1,386,554
(18,878)
155,705
(412,451)
(1,385,200)
27,068
37,283
-
127,573
(220,527)
131,354
(33,236)
(1,039,941)
19,591
83,191
618,514
51,201
163,744
8,835
-
(1,161,421)
40,864
9,686
(1,386,554)
-
18,878
155,705
The applicable weighted average effective tax rates are as follows:
-45.0%
-3.4%
The decrease in the weighted average effective consolidated tax rate for 2011 is a result of accelerated tax allowances on plant and equipment
compared to 2010.
(c)
Total deferred tax assets not brought to account
Deferred tax asset on tax losses
Deferred tax assets relating to temporary difference
2,284,853
236,890
2,521,743
2,381,720
991,191
3,372,911
22
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 5
Income Tax Expense (continued)
(d)
Tax effects relating to each component of other comprehensive income:
Consolidated Group
Gain on land and buildings
revaluation
Net change in fair value of cash
flow hedge
Note
20
14
Note 6
Discontinued Operations
(i)
Tangshan Hengfeng Paint Accessories Co.
Before-tax
amount
$
2011
Tax (expense)
benefit
$
Net-of-tax
amount
$
Before-tax
amount
$
2010
Tax (expense)
benefit
$
Net-of-tax
amount
$
(98,150)
29,445
(68,705)
(160,294)
48,088
(112,206)
(30,246)
(128,396)
9,074
38,519
(21,172)
(89,877)
100,076
(60,218)
(30,023)
18,065
70,053
(42,153)
On 31 October 2010, the Group disposed of its 47.5% interest in Tangshan Hengfeng Paint Accessories Co. The proceeds from the sale of
this investment were $1,054,138 which were received upon settlement on 25 February 2011. The loss on disposal of this investment was
$751,398 which has been included as part of the loss from discontinued operations for the year.
Share of net profit/(loss) of associates and joint ventures
Loss on disposal of investment in joint venture
2011
$
86,504
(837,902)
(751,398)
2010
$
(22,993)
-
(22,993)
H&O Products Pty Ltd
(ii)
On 31 October 2010, H&O Products Pty Ltd, the Group's consumer products division, was wound down. The loss for the year from the
discontinued operation is as follows:
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Impairment expense
Finance costs
Loss before income tax
Income tax expense
Loss for the year
The net cash flows of the discontinuing division which have been
incorporated into the statement of cash flows are as follows:
Net cash inflow/(outflow) from operating activities
Net cash inflow/(outflow) from investing activities
Net cash inflow/(outflow) from financing activities
Net cash increase in cash generated by the discontinuing division
2011
$
1,025,341
(1,388,425)
(363,084)
809,067
(270,203)
(51,420)
(173,723)
(43,657)
(2,923)
(69,735)
(165,678)
(1,452,008)
(1,617,686)
2010
$
6,022,243
(6,352,802)
(330,559)
18,055
(894,417)
(86,727)
(503,907)
(85,263)
(2,738,700)
(89,939)
(4,711,457)
1,441,588
(3,269,869)
623,459
228,273
(592,246)
259,485
143,641
(290,635)
4,847
(142,147)
Adelaide Garden Sheds Pty Ltd
(iii)
On 31 August 2010, Adelaide Garden Sheds Pty Ltd, one of the Group's retail alliances, was wound down. The loss for the year from the
discontinued operation is as follows:
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Impairment expense
Finance costs
Loss before income tax
Income tax expense
Loss for the year
The net cash flows of the discontinuing division which have been
incorporated into the statement of cash flows are as follows:
Net cash inflow/(outflow) from operating activities
Net cash inflow/(outflow) from investing activities
Net cash inflow/(outflow) from financing activities
Net cash increase in cash generated by the discontinuing division
23
2011
$
10,810
(13,593)
(2,783)
-
(22,164)
(2,708)
(6,284)
(2,824)
-
(1,102)
(37,865)
11,506
(26,359)
2010
$
165,980
(88,460)
77,520
288
(128,731)
(24,316)
(24,439)
-
(546)
(3,929)
(104,153)
31,213
(72,940)
(21,599)
14,566
-
(7,033)
(9,218)
546
(8,672)
(17,344)
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 6
Discontinued Operations (continued)
Backyard Installations Pty Ltd
(iv)
During the year, Backyard Installations Pty Ltd, one of the Group's retail alliances, was wound down. The loss for the year from the
discontinued operation is as follows:
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Impairment expense
Finance costs
Loss before income tax
Income tax expense
Loss for the year
The net cash flows of the discontinuing division which have been
incorporated into the statement of cash flows are as follows:
Net cash inflow/(outflow) from operating activities
Net cash inflow/(outflow) from investing activities
Net cash inflow/(outflow) from financing activities
Net cash increase in cash generated by the discontinuing division
2011
$
1,734,194
(1,348,167)
386,027
2,127
(871,503)
(167,034)
(132,799)
(17,828)
-
(931)
(801,941)
241,162
(560,779)
2010
$
2,096,452
(773,048)
1,323,404
44,732
(1,066,350)
(214,595)
(170,954)
-
(332)
(2,438)
(86,533)
25,812
(60,721)
(1,237)
(1,944)
(22,232)
(25,414)
(35,477)
-
(11,878)
(47,355)
Brisbane Garden Sheds Pty Ltd
(v)
During the year, the Group decided to dissolve the joint venture entity Brisbane Garden Sheds Pty Ltd. The wind-down of this entity is
expected to be completed by 30 September 2011.
Share of net profit/(loss) of associates and joint ventures
Note 7
Auditors’ Remuneration
Remuneration of the current auditor (PKF) of the parent entity for:
—
—
auditing or reviewing the financial report
taxation and advisory services
Remuneration of the previous auditor (Hall Chadwick) of the parent entity for:
—
—
auditing or reviewing the financial report
taxation and advisory services
Note 8
Dividends
(a)
(b)
Since the start of the financial year, no dividends have been paid or declared.
Balance of franking account at year end adjusted for franking credits arising from:
—
dividends recognised as receivables, and franking debits arising from payment
of proposed dividends, and franking credits that may be prevented from
distribution in subsequent financial years
Note 9
Interests of Key Management Personnel (KMP)
2011
$
12,565
12,565
2010
$
(44,038)
(44,038)
Consolidated Group
2011
2010
$
$
109,857
7,166
-
-
121,217
11,662
194,282
43,700
747,585
747,585
501,323
501,323
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each member of the Group’s key
management personnel for the year ended 30 June 2011.
The totals of remuneration paid to KMP of the company and the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments
2011
$
904,696
78,332
-
91,060
-
1,074,088
2010
$
952,945
63,012
-
-
21,600
1,037,557
24
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 9
Interests of Key Management Personnel (KMP) (continued)
KMP Options and Rights Holdings
The number of options over ordinary shares held during the financial year by each KMP of the Group is as follows:
30 June 2011
Maurice W Abbott
Braden Murrin
30 June 2010
Raymond John Titman
Anthony Mankarios
Christopher C Hext
Thomas D J Love
John Roy Westwood
Kenneth E Holloway
Gary J Guild
Maurice W Abbott
Braden Murrin
KMP Shareholdings
Balance at
beginning of
year
Granted as
remuneration
during the year
Exercised
during the year
Other changes
during the year
Balance at end
of year
Vested during
the year
Vested and
exercisable
Vested and
unexercisable
250,000
100,000
350,000
-
-
-
-
-
-
-
-
-
250,000
100,000
350,000
-
-
-
Balance at
beginning of
year
Granted as
remuneration
during the year
Exercised
during the year
Expired during
the year
Balance at end
of year
Vested during
the year
Vested and
exercisable
150,000
500,000
50,000
50,000
150,000
50,000
50,000
250,000
100,000
1,350,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(150,000)
(500,000)
(50,000)
(50,000)
(150,000)
(50,000)
(50,000)
-
-
(1,000,000)
-
-
-
-
-
-
-
250,000
100,000
350,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Vested and
unexercisable
-
-
-
-
-
-
-
-
-
-
The number of ordinary shares in Oldfields Holdings Limited held by each KMP of the Group during the financial year is as follows:
30 June 2011
Julie Garland McLellan
Raymond John Titman
Christopher Michael Giles
William Lewis Timms
Anthony Mankarios
Christopher C Hext
Robert A Coleman
30 June 2010
Raymond John Titman
William Lewis Timms
Anthony Mankarios
Christopher C Hext
Robert A Coleman
Kenneth E Holloway
Thomas D J Love
John Roy Westwood
Michael Leo Stafford
Gary J Guild
Maurice W Abbott
Other KMP Transactions
Balance at
beginning of
year
-
11,962
-
6,160,000
3,021,090
2,275,614
-
11,468,666
Granted as
remuneration
during the year
-
-
-
-
-
-
-
-
Balance at
beginning of
year
7,975
-
2,088,030
830,000
-
12,665
94,800
3,460,000
-
7,897
964,544
7,465,911
Granted as
remuneration
during the year
-
-
-
-
-
-
-
-
-
-
-
-
Issued on
exercise of
options during
the year
-
-
-
-
-
-
-
-
Issued on
exercise of
options during
the year
-
-
-
-
-
-
-
-
-
-
-
-
Other changes
during the year
-
31,962
700,000
13,532,264
-
2,525,614
-
16,789,840
Balance at end
of year
-
43,924
700,000
19,692,264
3,021,090
4,801,228
-
28,258,506
Other changes
during the year
3,987
6,160,000
933,060
1,445,614
-
6,340
82,400
1,953,144
17,544
3,589
93,461
10,699,139
Balance at end
of year
11,962
6,160,000
3,021,090
2,275,614
-
19,005
177,200
5,413,144
17,544
11,486
1,058,005
18,165,050
There have been no other transactions involving equity instruments other than those described in the tables above.
For details of other transactions with KMP, refer to Note 34: Related Party Transactions.
25
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 10
Earnings per Share
Reconciliation of earnings to loss for the year
Loss
Loss attributable to non-controlling equity interest
Earnings used to calculate basic EPS
Reconciliation of earnings to loss from continuing operations
Loss from continuing operations
Loss attributable to non-controlling equity interest in respect of continuing operations
Earnings used to calculate basic EPS from continuing operations
Reconciliation of earnings to loss from discontinuing operations
Loss from discontinuing operations
Loss attributable to non-controlling equity interest
Earnings used to calculated basic EPS from discontinuing operations
Consolidated Group
2011
2010
$
$
(3,021,043)
186,460
(2,834,583)
(8,650,248)
948,902
(7,701,346)
(1,993,351)
186,460
(1,806,891)
(4,773,038)
948,902
(3,824,136)
(1,027,692)
-
(1,027,692)
(3,877,210)
-
(3,877,210)
No.
No.
Weighted average number of ordinary shares outstanding during the year used in
calculating basic EPS
46,195,968
20,632,445
Diluted earnings per share is not reflected for discontinuing operations as the result is anti-dilutive in nature.
Options have not been included in the calculation of dilutive earnings per share as these are anti-dilutive in nature and would artificially increase the
earnings per share amount.
(a)
(b)
(c)
(d)
(e)
(f)
Note 11
Cash and Cash Equivalents
Cash at bank and in hand
Note
35
Consolidated Group
2011
2010
$
$
757,753
757,753
316,776
316,776
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows is reconciled
to items in the statement of financial position as follows:
Cash and cash equivalents
Bank overdrafts
24
757,753
(326,344)
431,409
316,776
(2,477,442)
(2,160,666)
A fixed and floating charge over cash and cash equivalents has been provided for certain debt. Refer to Note 24 for further details.
Note 12
Trade and Other Receivables
CURRENT
Trade receivables
Provision for impairment
Amounts receivable from:
—
—
associated companies
other receivables
Total current trade and other receivables
Note
12a
Consolidated Group
2011
2010
$
$
4,454,264
(247,019)
4,207,245
6,164,217
(436,769)
5,727,448
96,727
-
4,303,972
500,624
209,849
6,437,921
26
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 12
Trade and Other Receivables (continued)
(a)
Provision For Impairment of Receivables
Current trade and term receivables are non-interest bearing loans and generally on 30-day terms. A provision for impairment is recognised when there
is objective evidence that an individual trade or term receivable is impaired. These amounts have been included in the distribution expenses item in
the consolidated statement of comprehensive income.
Movement in the provision for impairment of receivables is as follows:
Consolidated Group
Current trade receivables
Consolidated Group
Current trade receivables
Credit risk
Opening
Balance
01.07.09
$
(159,256)
(159,256)
Opening
Balance
01.07.10
$
(436,769)
(436,769)
Charge for the
Year
Amounts
Written Off
$
(451,904)
(451,904)
$
174,391
174,391
Charge for the
Year
Amounts
Written Off
$
62,816
62,816
$
126,934
126,934
Closing
Balance
30.06.10
$
(436,769)
(436,769)
Closing
Balance
30.06.11
$
(247,019)
(247,019)
The Group has no significant concentration of credit risk with respect to any single counter party or group of counter parties. The class of assets described
as trade and other receivables is considered to be the main source of credit risk related to the Group.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to collateral and other credit enhancements) with ageing
analysis and impairment provided for thereon. Amounts are considered as ‘past due’ when the debt has not been settled with the terms and conditions
agreed between the Group and the customer or counter party to the transaction. Receivables that are past due are assessed for impairment by ascertaining
solvency of the debtors and are provided for where there are specific circumstances indicating that the debt may not be fully repaid to the Group.
The balances of receivables that remain within initial trade terms (as detailed in the table) are considered to be of high credit quality.
Consolidated Group
2011
Trade and term receivables
Other receivables
Total
Consolidated Group
2010
Trade and term receivables
Other receivables
Total
Gross Amount
$
4,454,264
96,727
4,550,991
Gross Amount
$
6,164,217
710,473
6,874,690
Past due and
impaired
$
247,019
-
247,019
Past due and
impaired
$
436,769
-
436,769
<30
$
300,260
-
300,260
<30
$
364,819
-
364,819
Past due but not impaired
(days overdue)
61-90
$
>90
$
31-60
$
96,930
-
96,930
Within initial
trade terms
$
3,810,055
96,727
3,906,782
-
-
-
Past due but not impaired
(days overdue)
61-90
$
31-60
$
84,186
-
84,186
>90
$
-
32,666
32,666
Within initial
trade terms
$
5,278,443
677,807
5,956,250
-
-
-
-
-
-
Neither the Group nor parent entity holds any financial assets with terms that have been renegotiated, but which would otherwise be past due or impaired.
(b)
Financial Assets Classified as Loans and Receivables
Trade and other Receivables
— Total current
— Total non-current
Consolidated Group
2011
2010
$
$
4,303,972
-
4,303,972
6,437,921
-
6,437,921
(c)
Collateral Pledged
A fixed and floating charge over trade receivables has been provided for certain debt. Refer to Note 24 for further details.
Note 13
Inventories
CURRENT
At cost:
Raw materials and stores
Work in progress
Finished goods
Goods in transit
Less provisions
Consolidated Group
2011
2010
$
$
1,159,050
21,600
3,839,702
391,736
5,412,088
(289,814)
5,122,274
3,823,687
3,461
3,599,848
431,986
7,858,982
(1,586,057)
6,272,925
The reduction in inventory and provisions predominately relates to the sale of inventory through the orderly wind-down of H&O Products Pty Ltd in October
2010.
27
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 14
Derivatives
CURRENT
Forward exchange contracts
Note
35
Consolidated Group
2011
2010
$
$
(11,931)
(11,931)
9,241
9,241
Forward exchange contracts are used to hedge cash flow risk associated with future transactions. Gains and losses arising from changes in the fair value of
derivatives are initially recognised directly in a hedge reserve in the equity section of the statement of financial position. At the date of the transaction,
amounts included in the hedge reserve are transferred from equity and included in either the statement of comprehensive income or the cost of assets. The
statement of changes in equity includes transfers to and from the hedge reserve.
Note 15
Non-current assets held for sale
CURRENT
Amounts transferred from property, plant and equipment
Amounts transferred from investment property
Consolidated Group
2011
2010
$
$
20a
21
333,868
1,865,528
2,199,396
-
-
-
The property held at St Marys New South Wales was revalued at 27 May 2011 by the directors of Oldfields Holdings Limited in line with commercial
valuations. A contract for the sale of this property was exchanged on 7 September 2011 with settlement expected by 30 September 2011. The
consideration from the sale of this property will be used to reduce the overall debt of the Group.
Note 16
Other Assets
CURRENT
Prepayments
Assets in progress
Other debtors
Financial Assets Classified as Loans and Receivables
Other assets
— Total current
— Total non-current
Note 17
Investments Accounted for Using the Equity Method
Associated companies
Note 18
Associated Companies
Note
Consolidated Group
2011
2010
$
$
341,736
49,438
1,716,766
2,107,940
480,631
-
-
480,631
1,716,766
-
1,716,766
-
-
-
Consolidated Group
2011
2010
$
$
1,491,089
1,491,089
2,712,355
2,712,355
35
Note
18a
Interests are held in the following associated companies
Name
Principal Activities
Country of
Incorporation
Shares
Ownership Interest
Unlisted:
PT Ace Oldfields
Brisbane Garden Sheds
Enduring Enterprises
Honeytree & Partners
Tangshan Hengfeng
Paint Brush Manufacturer
Garden Shed Supplier
Hardware Reseller
Hardware Marketing
Paint Brush Manufacturer
Indonesia
Australia
Singapore
Singapore
China
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2011
%
49.00%
50.00%
49.00%
49.00%
0.00%
2010
%
49.00%
50.00%
49.00%
49.00%
47.50%
Carrying Amount of Investment
2010
2011
$
$
1,246,863
-
125,118
119,108
-
1,491,089
1,285,252
-
98,606
126,985
1,201,512
2,712,355
(i)
The Group contributed $224,995 in March 2011 to a rights issue in PT Ace Oldfields, being the Group's manufacturing plant in Jakarta. After this
rights issue, the Group remained a 49% shareholder as all shareholders took up their pro-rata rights. The funds were used to reduce debt and provide
working capital.
The Group disposed of its interest in Tangshan Hengfeng Paint Accessories Co in December 2010.
(ii)
(iii) With the exception of Brisbane Garden Sheds Pty Ltd, all associated companies listed above report on a financial year ending 31 December in
accordance with the laws and regulations of the country of incorporation.
28
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 18
Associated Companies (continued)
(a)
Movements during the year in equity accounted investment in
associated companies
Note
Balance at beginning of the financial year
New investments during the year
Share of associated company’s profit after income tax
Disposals during the year
Foreign currency translation losses
Other adjustments
Balance at end of the financial year
18b
(b)
(c)
Equity accounted profits of associates are broken down as
Share of associate’s profit from continuing operations before income
tax expense
Share of associate’s loss from discontinued operations before
income tax expense
Share of associate’s profit after income tax
Summarised presentation of aggregate assets, liabilities and
performance of associates
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Revenues
Profit after income tax of associates
Note 19
Controlled Entities
Consolidated Group
2011
2010
$
$
2,712,355
224,995
349,770
(1,288,016)
(438,623)
(69,392)
1,491,089
2,407,837
472,292
69,184
(224,611)
(12,347)
-
2,712,355
263,266
136,214
86,504
349,770
(67,030)
69,184
3,660,941
466,208
4,127,149
1,768,418
867,641
2,636,059
1,491,090
4,209,098
1,956,520
6,165,618
2,340,955
1,112,308
3,453,263
2,712,355
6,077,790
6,188,567
349,770
69,184
Country of Incorporation
Percentage Owned (%)*
2011
2010
Subsidiaries of Oldfields Holdings Limited:
Oldfields Pty Limited
Oldfields Access Pty Limited
Oldfields Administration Pty Limited
Oldfields International Pty Limited
Advantage Contracting Pty Limited
Advantage Scaffolding Pty Limited
Shed Holdings Pty Limited
Advance Scaffold Solutions Pty Limited
NOST Investments Pty limited
Subsidiaries of Oldfields Pty Limited:
Midco Pty Limited
Subsidiaries of Oldfields Access Pty Limited:
Adelaide Scaffold Solutions Pty Limited
Subsidiaries of Oldfields Administration Pty
National Office Service Trust
Subsidiaries of NOST Investments Pty Limited:
H & O Products Pty Limited
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Subsidiaries of Oldfields International Pty Ltd:
Oldfields (NZ) Limited
Oldfields Paint Applications (NZ) Limited
Oldfields USA Incorporated
Scaffold Management Systems Pty Limited
New Zealand
New Zealand
USA
Australia
Subsidiaries of Shed Holdings Pty Limited:
Backyard Installations Pty Limited
Sheds Plus Pty Limited
Adelaide Garden Sheds Pty Limited
Australia
Australia
Australia
Subsidiaries of Advance Scaffold Solutions Pty Limited:
Scaffold The World Pty Limited
Foshan Advcorp Pty Limited
Australia
China
* Percentage of voting power is in proportion to ownership
29
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
60.00%
60.00%
100.00%
100.00%
75.00%
75.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 20
Property, Plant and Equipment
LAND AND BUILDINGS
Freehold land at:
— directors’ valuation (2010: 24 July 2010)
— independent valuation (2010: June 2010)
Total land
Buildings at:
— directors’ valuation (2010: 24 July 2010)
— independent valuation (2010: June 2010)
Total buildings
Total land and buildings
PLANT AND EQUIPMENT
Plant and equipment:
At cost
Accumulated depreciation
Accumulated impairment losses
Leasehold improvements:
At cost
Accumulated amortisation
Motor vehicles:
At cost
Accumulated depreciation
Total plant and equipment
Total property, plant and equipment
Consolidated Group
2011
2010
$
$
-
-
-
-
-
-
-
350,658
879,100
1,229,758
44,022
740,900
784,922
2,014,680
13,524,740
(4,656,679)
-
8,868,061
15,835,724
(4,900,906)
(975,756)
9,959,062
321,665
(175,666)
145,999
309,495
(162,402)
147,093
2,539,179
(1,896,995)
642,184
9,656,244
2,529,626
(1,644,072)
885,554
10,991,709
9,656,244
13,006,389
(i)
(ii)
(iii)
(a)
A contract for the sale of land and buildings at Archerfield in Queensland was exchanged on 19 April 2011 and was settled on 15 July 2011.
Consideration from this disposal was used to reduce the overall debt of the Group.
Land and buildings at St Marys, New South Wales has been classified as non-current assets held for sale as a contract for the sale of this property
was exchanged on 7 September 2011. Refer to Note 15.
Included in the plant and equipment balance is scaffold equipment for hire held by Oldfields Access Pty Ltd and Adelaide Scaffold Solutions Pty Ltd
amounting to $7,850,383.
Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.
Consolidated Group:
Balance at 1 July 2009
Additions
Disposals
Revaluation decrements
Depreciation expense
Accumulated impairment losses
Balance at 30 June 2010
Additions
Disposals
Revaluation decrements
Depreciation expense
Reclassification as assets held for sale
Reverse prior year impairment losses
Balance at 30 June 2011
Land &
Buildings
$
Leasehold
Improvements
$
Plant and
Equipment Motor vehicles
$
$
Total
$
2,484,395
-
(410,424)
-
(59,291)
-
2,014,680
-
(1,601,478)
(59,711)
(19,623)
(333,868)
-
-
220,984
107,749
-
(129,187)
(52,453)
-
147,093
34,248
(6,881)
-
(28,461)
-
-
145,999
11,963,881
809,964
(550,354)
-
(1,288,673)
(975,756)
9,959,062
1,231,265
(1,626,823)
(21,726)
(758,911)
-
85,194
8,868,061
1,051,579
303,783
(106,408)
-
(363,400)
-
885,554
104,378
(22,356)
-
(377,233)
-
51,841
642,184
15,720,839
1,221,496
(1,067,186)
(129,187)
(1,763,817)
(975,756)
13,006,389
1,369,891
(3,257,538)
(81,437)
(1,184,228)
(333,868)
137,035
9,656,244
(b)
Impairment Losses
The total impairment loss recognised in the statement of comprehensive income during the prior period amounted to $975,756 which predominately
related to H&O Products Pty Ltd and has been included in loss from discontinued operations in the statement of comprehensive income.
The impairment losses reversed in the current year relate to assets previously held by H&O Products Pty Ltd and were impaired in the prior year based
on the assumption that they could not be used or sold. However, during the year these assets were transferred to other divisions within the Group and
the impairment reversed.
The recoverable amount of the cash generating unit has been determined to be its fair value less costs to sell. The fair value was determined with
reference to an active market, where the market price of similar equipment and of a similar age was used as the benchmark. Costs for selling the
equipment were estimated based on the company's prior history of selling similar equipment.
30
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 21
Investment Property
Balance at beginning of year
Disposals
Fair value adjustments
Reclassification as assets held for sale
Balance at end of year
Consolidated Group
2011
2010
$
$
2,205,320
-
(339,792)
(1,865,528)
-
4,316,900
(1,600,000)
(511,580)
-
2,205,320
The property at St Marys New South Wales was revalued on 27 May 2011 by the directors of Oldfields Holdings Limited in line with commercial valuations.
This property has been reclassified as a non-current asset held for sale as a contract for the sale of this property was exchanged on 7 September 2011.
Refer to Note 15.
Note 22
Intangible Assets
Goodwill
Cost
Accumulated impaired losses
Net carrying value
Trademarks and licences
Cost
Accumulated amortisation and impairment
Net carrying value
Software
Cost
Accumulated amortisation
Net carrying value
Total intangibles
Year ended 30 June 2010
Balance at the beginning of year
Additions
Additions through business combinations
Disposals
Amortisation charge
Impairment losses
Year ended 30 June 2011
Balance at the beginning of year
Additions
Disposals
Amortisation charge
Impairment losses
Closing value at 30 June 2011
Consolidated Group
2011
2010
$
$
5,160,370
(4,181,376)
978,994
5,126,519
(4,135,616)
990,903
237,264
(172,496)
64,768
206,289
(130,062)
76,227
237,264
(128,027)
109,237
212,907
(110,236)
102,671
1,119,989
1,202,811
Goodwill
$
Trademarks &
Licences
$
Software
Development
$
1,039,964
-
58,618
-
(107,679)
-
990,903
990,903
45,760
(11,909)
-
(45,760)
978,994
131,200
10,597
-
-
(20,560)
(12,000)
109,237
109,237
-
-
(44,469)
-
64,768
89,824
128,161
-
(5,852)
(51,929)
(57,533)
102,671
102,671
-
(6,619)
(19,825)
-
76,227
Total
$
1,260,988
138,758
58,618
(5,852)
(180,168)
(69,533)
1,202,811
1,202,811
45,760
(18,528)
(64,294)
(45,760)
1,119,989
Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under distribution
expenses per the statement of comprehensive income. The remaining amortisation period for these intangible assets is between 3 and 5 years. Goodwill
has an infinite life.
Impairment disclosures
Goodwill is allocated to cash-generating units which are based on the Group’s reporting segments.
Wholesale/retail segment
Scaffolding segment
Total
2011
$
140,565
838,429
978,994
2010
$
152,474
838,429
990,903
The recoverable amount of each cash-generating unit above is determined based on value-in-use calculations. Value-in-use is calculated based on the
present value of cash flow projections over a 5-year period.
The following assumptions were used in the value-in-use calculations:
Wholesale/retail segment
Scaffolding segment
Growth Rate Discount Rate
3.00%
3.00%
9.80%
9.80%
Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use historical weighted average growth rates
to project revenue. Costs are calculated taking into account historical gross margins as well as estimated weighted average inflation rates over the period
which are consistent with inflation rates applicable to the locations in which the segments operate. Discount rates are pre-tax and are adjusted to incorporate
risks associated with a particular segment.
31
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
(a)
Financial liabilities at amortised cost classified as trade and other payables
Trade and other payables
Note 23
Trade and Other Payables
CURRENT
Unsecured liabilities
Trade payables
Trade finance facility
Sundry payables and accrued expenses
Amounts payable to:
—
associated companies
— Total current
— Total non-current
Financial liabilities as trade and other payables
Note 24
Borrowings
CURRENT
Secured liabilities
Bank overdrafts
Bank loans
Lease liabilities
Hire purchase liabilities
Total current borrowings
NON-CURRENT
Unsecured liabilities
Other related parties
Secured liabilities
Hire purchase liabilities
Total non-current borrowings
Total borrowings
Total current and non-current secured liabilities:
Bank overdraft
Bank loans
Lease liabilities
Hire purchase liabilities
Note
Consolidated Group
2011
2010
$
$
35
Note
24a,f
24a,f
3,073,808
946,011
990,879
4,851,996
703,034
1,097,895
4,575
5,015,273
-
6,652,925
5,015,273
-
5,015,273
6,652,925
-
6,652,925
Consolidated Group
2011
2010
$
$
326,344
16,750,966
-
496,082
17,573,392
2,477,442
16,078,323
33,536
677,528
19,266,829
139,750
1,523,040
224,788
364,538
701,803
2,224,843
35
17,937,930
21,491,672
326,344
16,750,966
-
720,870
17,798,180
2,477,442
16,078,323
33,536
1,379,331
19,968,632
(a)
(b)
(c)
(d)
(e)
(f)
All bank loans have been classified as current in the financial report in accordance with the requirements of AASB101 Presentation of Financial
Statements. Under AASB101, unless the Group had an "unconditional right to defer settlement for at least twelve months after the reporting period",
the borrowings must be classified as current. As the finance facility agreement was in the process of being negotiated as at 30 June 2011 and no
formal offer had been received prior to the end of the year, the Group did not satisfy the AASB101 requirement. As this was also the case in the prior
year, the balances as at 30 June 2010 have been reclassified. For details on the reclassification refer to Note 37.
On 26 August 2011, the Group renewed the agreement with its bankers for a further 11 month period. The banks facility agreement includes normal
commercial terms and conditions which are subject to such covenants as interest cover ratios; capital expenditure limits; debt service cover ratios;
and the Group cannot create or acquire a new subsidiary unless that subsidiary becomes a party to the agreement.
The Group breached one of its bank covenants in the months of May 2011 and June 2011, however a waiver was received from the bank prior to year
end.
The carrying amounts of assets pledged as security are:
Investment property classified as available for sale
Freehold land and buildings
Floating charge over assets, including listed investments at market value
2,199,396
-
2,205,320
2,014,680
24,594,591
26,793,987
28,485,400
32,705,400
Collateral provided
The bank overdrafts of the parent entity and controlled entities are secured by a floating charge over assets of the Group.
The bank debt and mortgage loans are secured by a registered first mortgage over certain freehold properties owned by the Group.
Lease liabilities are secured by the underlying leased assets. Hire purchase liabilities are secured by a charge over the hire purchased assets.
Financial assets that have been pledged as part of the total collateral for the benefit of bank debt are as follows:
Cash and cash equivalents
Trade receivables
Total financial assets pledged
Note
11
12
Consolidated Group
2011
2010
$
$
757,753
4,207,245
4,964,998
316,776
5,727,448
6,044,224
The collateral over cash and cash equivalents represents a floating charge.
32
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 25
Tax
CURRENT
Income tax payable
TOTAL
NON-CURRENT
Consolidated Group
Deferred tax liability
Property, plant and equipment
- tax allowance
Tangible assets revaluation
Prepayments
Leases
Investment
Foreign current exchange losses
Loss on sale of assets
Other
Balance at 30 June 2010
Other
Balance at 30 June 2011
Deferred tax assets
Provisions
Other
Balance at 30 June 2010
Provisions
Other
Balance at 30 June 2011
Consolidated Group
2011
2010
$
$
83,513
83,513
97,934
97,934
Opening
Balance
$
Charged to
Income
$
Closing
Balance
$
140,063
280,294
12,478
27,375
23,153
19,533
20,780
(501,044)
22,632
-
-
-
-
-
59,347
1,684
61,031
(140,063)
(280,294)
(12,478)
(27,375)
(23,153)
(19,533)
(20,780)
501,044
(22,632)
-
-
-
-
-
-
-
-
359
359
359
359
59,347
1,684
61,031
(24,017)
(1,684)
(25,701)
59,347
1,684
61,031
35,330
-
35,330
Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(d) occur:
- temporary differences $236,890 (2010: $991,191)
- tax losses: operating losses $2,284,853 (2010: $2,381,720)
Note 26
Provisions
CURRENT
Short-term Employee Benefits
Opening balance at 1 July 2010
Net of additional provisions and unused amounts reversed
Amounts used
Balance at 30 June 2011
Other
Opening balance at 1 July 2010
Additional provisions
Amounts used
Balance at 30 June 2011
NON CURRENT
Long-term Employee Benefits
Opening balance at 1 July 2010
Net of additional provisions and unused amounts reversed
Amounts used
Balance at 30 June 2011
Analysis of Total Provisions
Current
Non-current
Provision for Employee Benefits
Consolidated Group
2011
2010
$
$
1,073,214
570,467
(658,490)
985,191
969,631
659,782
(556,199)
1,073,214
78,633
-
(78,633)
-
985,711
78,633
(985,711)
78,633
147,347
(42,914)
(39,180)
65,253
143,460
41,023
(37,136)
147,347
985,191
65,253
1,050,444
1,151,847
147,347
1,299,194
Short-term employee benefits include annual leave and current obligations for long service leave payable within 12 months.
Other provisions related to redundancy payments on winding up of H&O Products Pty Ltd during the year.
Long-term employee benefits includes obligations for long service leave not payable within 12 months.
In calculating the present value of future cash flows
in respect of long service leave, the probability of long service leave being taken is based on historical data. The measurement and recognition criteria
relating to employee benefits have been included in Note 1.
33
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 27
Issued Capital
56,043,605 fully paid ordinary shares (2010: 27,995,763)
The company has authorised share capital amounting to 56,043,605 ordinary shares.
(a)
Ordinary Shares
At the beginning of the reporting period
Shares issued during the year
—
—
—
—
—
—
21 July 2010 (2010: 6 July 2009)
30 November 2010 (2010: 14 August 2009)
16 November 2009
20 November 2009
23 December 2009
14 May 2010
At the end of the reporting period
Consolidated Group
2011
2010
$
$
18,751,301
18,751,301
15,657,109
15,657,109
Consolidated Group
2011
2010
No.
No.
27,995,763
14,320,868
5,067,308
22,980,534
-
-
-
-
56,043,605
1,223,451
200,000
2,263,514
100,000
5,508,646
4,379,284
27,995,763
On 21 July 2010, the company issued 5,067,308 ordinary shares at $0.17 each to shareholders on the basis of 1 share for every 2 shares held raising
$861,442.
On 30 November 2010, the company issued 22,980,534 ordinary shares at $0.10 each to shareholders on the basis of 1 share for every 1 share held
raising $2,298,053.
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. The fully paid
ordinary shares have no par value.
At the shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of
hands.
(b) Options
(i)
There have been no options issued or exercised during the year.
(ii)
For information relating to share options issued to key management personnel during the financial year refer to Note 7.
(c)
Capital Management
Management control the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders with adequate returns and
ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
The group is subject to financing covenants as detailed in Note 24(b)
Management effectively manages the Group’s capital by assessing the Group's financial risks and adjusting its capital structure in response to
changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. This strategy is to identify
opportunities to reduce the Group’s gearing ratio. The gearing ratios for the year ended 30 June 2011 and 30 June 2010 are as follows:
Total borrowings
Less cash and cash equivalents
Net debt
Total equity
Total capital
Gearing ratio
Note
23, 24
11
Consolidated Group
2011
2010
$
$
22,953,203
(757,753)
22,195,450
2,694,537
24,889,987
28,144,597
(316,776)
27,827,821
3,163,675
30,991,496
89%
90%
34
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 28
Capital and Leasing Commitments
(a)
(b)
—
—
—
Finance Lease Commitments
Payable — minimum lease payments
not later than 12 months
between 12 months and 5 years
greater than 5 years
Minimum lease payments
Less future finance charges
Present value of minimum lease payments
Consolidated Group
2011
2010
$
$
549,033
243,369
-
792,402
(71,531)
720,871
860,319
723,891
-
1,584,210
(171,343)
1,412,867
Note
24
Included in finance lease commitments are hire purchase liabilities that are secured by a charge over the hire purchase asset.
Operating Lease Commitments
Non-cancellable operating leases contracted for but not capitalised
in the financial statements
Payable — minimum lease payments
not later than 12 months
between 12 months and 5 years
greater than 5 years
—
—
—
1,143,839
1,519,438
-
2,663,277
1,095,153
2,010,378
-
3,105,531
The property leases are non-cancellable leases with 3-5 year terms, with rent payable monthly in advance. Contingent rental provisions within the
lease agreement state that the minimum lease payments shall be increased by the lower of CPI or 3-5% per annum. Options exist to renew certain
leases at the end of the lease term for an additional term of 3-5 years.
Note 29
Contingent Liabilities and Contingent Assets
The Group does not have any significant contingent liabilities or contingent assets as at 30 June 2011 or 30 June 2010.
Note 30
Operating Segments
Segment Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors in assessing
performance and in determining the allocation of resources.
The Group is managed primarily on the basis of product category and service offerings since the diversification of the Group's operations inherently have
notably different risk profiles and performance assessment criteria. Operating segments are therefore determined on the same basis.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered to have similar economic characteristics
and are also similar with respect to the following:
—
the products sold and/or services provided by the segment;
the manufacturing process;
the type or class of customer for the products or service;
the distribution method; and
any external regulatory requirements.
—
—
—
—
Types of products and services by segment
(i)
Wholesale/retail
The wholesale/retail segment manufactures and markets paint brushes, paint rollers, painters tools, spray guns, Treco garden sheds, outdoor storage
systems, aviaries and pet homes.
(ii)
(iii)
(iv)
Scaffolding
The scaffolding segment manufactures and markets scaffolding and related equipment.
related products to the building and construction industry.
Consumer products
The consumer products segment manufactures and distributes cleaning and personal care products. This segment ceased operation during the year
with the orderly wind down of H&O Products Pty Ltd in October 2010.
Property
The property segment manages investment properties held by the Group.
In addition, this segment is engaged in hiring scaffolding and
35
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 30
Operating Segments (continued)
Basis of accounting for purposes of reporting by operating segments
(a)
(b)
(c)
(d)
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors as the chief decision maker with respect to operating segments are determined
in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group.
Inter-segment transactions
All inter-segment transactions are eliminated on consolidation for the Group's financial statements.
Corporate charges are allocated to reporting segments based on the segment's overall proportion of revenue generation within the Group. The Board
of Directors believes this is representative of likely consumption of head office expenditure that should be used in assessing segment performance and
cost recoveries.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that receives the majority of economic value from that asset.
In the majority of instances, segment assets are clearly identifiable on the basis of their nature and physical location.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of the segment. Borrowings
and tax liabilities are generally considered to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other payables
and certain direct borrowings.
(i) Segment performance
30 June 2011
Continuing operations:
Revenue
External sales
Other revenue
Inter-segment sales
Total group revenue
Reconciliation of segment result to group net
loss before tax
Segment net profit/(loss) before tax
Inter-segment elimination
Net profit before tax from continuing operations
Wholesale
Retail
$
Scaffolding
$
Consumer
$
Property
$
Corporate
$
Total
$
11,992,977
331,379
-
12,324,356
18,673,718
343,370
-
19,017,088
-
-
-
-
-
429,127
-
429,127
-
7,251,466
-
7,251,466
30,666,695
8,355,342
(7,576,139)
31,445,898
(2,526,855)
(386,473)
(126,071)
(520,152)
2,259,489
Share of net profit/(loss) from associates after tax
263,266
-
Impairment losses
(31,836)
(45,760)
-
-
Discontinued operations:
External sales
Other revenue
Inter-segment sales
Total revenue from discontinued operations
1,745,003
2,126
-
1,747,129
Segment net loss before tax from discontinued
(1,340,388)
-
-
-
-
-
1,025,342
809,067
-
1,834,409
(19,915)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2010
Continuing operations:
Revenue
External sales
Other revenue
Inter-segment sales
Total group revenue
Reconciliation of segment result to group net
loss before tax
Segment net profit/(loss) before tax
Inter-segment elimination
Net profit before tax from continuing operations
Wholesale
Retail
$
Scaffolding
$
Consumer
$
Property
$
Corporate
$
Total
$
11,854,347
303,810
-
12,158,157
19,839,402
1,071,410
-
20,910,812
-
-
-
-
-
550,337
-
550,337
-
5,787,933
-
5,787,933
31,693,749
7,713,490
(6,404,767)
33,002,472
(505,725)
(895,552)
(147,626)
(784,026)
(3,206,413)
Share of net profit/(loss) from associates after tax
136,214
-
Impairment losses
(149,888)
(226,171)
-
-
Discontinued operations:
External sales
Other revenue
Inter-segment sales
Total revenue from discontinued operations
2,262,432
45,020
2,307,452
Segment net loss before tax from discontinued
(257,717)
-
-
-
-
6,022,243
18,055
6,040,298
(4,711,458)
-
-
-
-
-
-
-
-
-
-
-
-
36
(1,300,062)
(74,775)
(1,374,837)
263,266
(77,596)
2,770,345
811,193
-
3,581,538
(1,360,303)
(5,539,342)
549,504
(4,989,838)
136,214
(376,059)
8,284,675
63,075
-
8,347,750
(4,969,175)
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 30
Operating Segments (continued)
(ii) Segment assets
30 June 2011
Segment assets
Intersegment eliminations
Total group assets
30 June 2010
Segment assets
Intersegment eliminations
Total group assets
(iii) Segment liabilities
30 June 2011
Segment liabilities
Intersegment eliminations
Total group liabilities
30 June 2010
Segment liabilities
Intersegment eliminations
Total group liabilities
Wholesale
Retail
$
Scaffolding
$
Consumer
$
Property
$
Corporate
$
Total
$
16,273,454
16,351,523
-
3,911,231
17,470,508
54,006,716
(27,212,729)
26,793,987
Wholesale
Retail
$
Scaffolding
$
Consumer
$
Property
$
Corporate
$
Total
$
20,589,617
20,244,393
5,758,698
4,369,739
19,339,487
70,301,934
(37,596,534)
32,705,400
Wholesale
Retail
$
Scaffolding
$
Consumer
$
Property
$
Corporate
$
Total
$
(15,624,985)
(20,308,759)
(1,911,161)
(4,488,446)
(2,458,670)
(44,792,021)
20,692,571
(24,099,450)
Wholesale
Retail
$
Scaffolding
$
Consumer
$
Property
$
Corporate
$
Total
$
(17,066,904)
(23,353,612)
(10,244,375)
(4,448,992)
(7,631,929)
(62,745,812)
33,204,087
(29,541,725)
(iv) Revenue by geographical region
Revenue attributable to external customers is disclosed below, based on the location of the external customer:
30 June 2011
Domestic
International
Inter-segment elimination
Total revenue
30 June 2010
Domestic
International
Inter-segment elimination
Total revenue
Wholesale
Retail
$
10,983,620
1,340,736
-
12,324,356
Wholesale
Retail
$
10,656,900
1,501,257
-
12,158,157
Scaffolding
$
18,279,146
737,942
-
19,017,088
Scaffolding
$
19,962,084
948,728
-
20,910,812
Consumer
Property
Corporate
Total
-
-
-
-
429,127
-
-
429,127
7,251,466
-
-
7,251,466
36,943,359
2,078,678
(7,576,139)
31,445,898
Consumer
Property
Corporate
Total
-
-
-
-
550,337
-
-
550,337
5,787,933
-
-
5,787,933
36,957,254
2,449,985
(6,404,767)
33,002,472
37
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 31
Cash Flow Information
(a)
Reconciliation of Cash Flow from Operations with Loss
after Income Tax
Loss after income tax
Non-cash flows in loss
Depreciation and amortisation
Impairment losses
Net (gain)/loss on disposal of property, plant and equipment
Unrealised exchange gains/losses
Write back of loans to related parties
Net (gain)/loss on disposal of investments
Net (gain)/loss on revaluation of investment property
Write back of prior year revenue accrued
Write back of prior year provision for dividend
Write back of prior year accrual for interest payable
Unrealised (gain)/loss on investments and derivatives
Net loss on remeasurement of equity investment due to business combination
Share options expensed
Share of associated companies net profit after income tax and dividends
Changes in assets and liabilities, net of the effects of purchase and disposal of
subsidiaries
(Increase)/decrease in trade and term receivables
(Increase)/decrease in prepayments and other current assets
(Increase)/decrease in inventories
Increase/(decrease) in trade payables and accruals
Increase/(decrease) in income taxes payable
Increase/(decrease) in deferred taxes payable
Increase/(decrease) in provisions
Cash flow from operations
Consolidated Group
2011
2010
$
$
(3,021,043)
(8,650,247)
1,248,522
77,596
570,555
(109,438)
(990,649)
751,399
393,354
57,137
16,673
(2,710)
-
-
-
(362,335)
(1,924,102)
1,417,461
(1,150,650)
1,625,087
14,420
(26,060)
248,750
(1,166,033)
1,544,459
3,115,637
(71,415)
-
-
(82,008)
-
-
-
812,553
516,000
29,449
(69,184)
(2,151,636)
135,432
1,948,220
1,764,805
(199,357)
(219,116)
592,032
(984,376)
(b)
Acquisition of Entities
During the financial year ended 30 June 2010, a further 65.4% ownership in Scaffold Management Systems Pty Ltd (SMS) was acquired. Details of
this transaction are as follows:
Purchase consideration
Consisting of:
30,545
-
— Cash consideration
Total consideration
Cash consideration
Cash outflow
Assets and liabilities held at acquisition date:
Receivables
Prepayments and other assets
Investments
Payables
Fair value of previously held interest in Scaffold Management Systems Pty Ltd
Goodwill on consolidation
-
-
-
-
-
-
-
-
-
-
-
-
30,545
30,545
30,545
30,545
157,579
132,320
19,682
(639,209)
(329,628)
301,555
58,618
30,545
The goodwill is attributable to the significant synergies expected to arise after the Group’s acquisition of Scaffold Management Systems Pty Ltd.
Note 32
Share-based Payments
A summary of the movements of all company options issued is as follows:
Options outstanding as at 30 June 2009
Expired
Options outstanding as at 30 June 2010
Options outstanding as at 30 June 2011
Options exercisable as at 30 June 2011:
Options exercisable as at 30 June 2010:
Consolidated Group
Weighted
average
exercise price
-
Number
1,625,000
(1,275,000)
350,000
350,000
350,000
350,000
As at the date of exercise, the weighted average share price of options exercised during the year was $1.20.
The weighted average remaining contractual life of options outstanding at year end was less than 1 year. The exercise price of outstanding shares at the
end of the reporting period was $1.20.
38
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 33
Events After the Reporting Period
On 15 July 2011, the contract for sale of the property at Archerfield QLD was settled. Consideration received in relation to this sale was used to reduce the
overall debt of the Group.
On 28 August 2011, the company signed an agreement with its bankers for a finance facility for a further 11 month period.
On 7 September 2011, an unconditional contract for the sale of the property at St Marys NSW was exchanged and is expected to be settled by 30
September 2011. Consideration of $2.2 million will be used to reduce the overall debt of the Group.
There were no other significant events occurring after balance date.
Note 34
Related Party Transactions
(a)
(i)
(ii)
The Group's main related parties are as follows:
Entities exercising control over the Group:
The ultimate parent entity, which exercises control over the group, is Oldfields Holdings Limited which is incorporated in Australia.
Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any
director (whether executive or otherwise) of that entity are considered key management personnel.
For details of disclosures relating to key management personnel, refer to Note 9: Interests of Key Management Personnel.
(iii)
Entities subject to significant influence by the Group:
An entity which has the power to participate in the financial and operating policy decisions of an entity, but does not have control over those policies is
an entity which holds significant influence. Significant influence may be gained by share ownership, statute or agreement.
For details of interests held in associated companies, refer to Note 18: Associated Companies.
Other Related Parties
Other related parties include entities controlled by the ultimate parent entity and entities over which key management personnel exercise significant
influence.
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
The following transactions occurred with related parties:
(iv)
(b)
(i)
(ii)
Associated Companies
Sales of Treco Garden Sheds by Oldfields Pty Ltd to Brisbane Garden Sheds
Purchase of paint applications products by Oldfields Pty Ltd from Enduring
Enterprises
Other Related Parties
Administration service fee paid to Sibley Investments Pty Ltd, being the holder of a
minority interest in Adelaide Scaffold Solutions Pty Ltd
Dividends paid to Sibley Investments Pty Ltd, being the holder of a minority interest
in Adelaide Scaffold Solutions Pty Ltd
Rent paid to 8 Farrow Road Pty Ltd, being an entity related to former director Mr
John R Westwood (resigned Nov 2009)
Facilitation fees paid:
- Timms and Timms, being an entity related to director William Lewis Timms
- UFBA Pty Limited, being a significant shareholder in Oldfields Holdings Limited
Interest paid:
- Sibley Investments Pt Ltd, being the holder of a minority interest in Adelaide
Scaffold Solutions Pty Ltd
- John R Westwood, being a former director (resigned Nov 2009)
- Maurice W Abbot, being a part of the key management personnel within the Group
- Anthony Mankarios, being a former director (resigned 23 July 2010)
- Christopher C Hext, being a former director (resigned 8 July 2011)
- William Lewis Timms, being a director of Oldfields Holdings Limited
- Michael Mankarios, being related to former director Anthony Mankarios
(iii)
Loans payable to Other Related Parties
Loan payable to Sibley Investments Pty Ltd, being the holder of a minority interest in
Adelaide Scaffold Solutions Pty Ltd
Beginning of the year
Loan repayments paid during the year
End of the year
Consolidated Group
2011
2010
$
$
364,223
590,442
1,554,332
1,455,248
233,376
205,740
-
-
-
-
54,000
-
-
-
-
-
-
172,500
470,919
90,324
14,088
54,000
48,247
3,333
2,000
2,667
3,419
750
299,750
(160,000)
139,750
299,750
-
299,750
Sibley Investments Pty Ltd have agreed that the balance of the loan will not be called in over the next 12 months.
39
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 35
Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term investments, accounts receivable and
payable, loans to and from subsidiaries, bills, leases, preference shares and derivatives.
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to these financial
statements, are as follows:
Financial Assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
—
derivative instruments
Loans and receivables
Total Financial Assets
Financial Liabilities
Financial liabilities at amortised cost
trade and other payables
trade finance facility
borrowings
derivative instruments
Total Financial Liabilities
—
—
—
—
Consolidated Group
2011
2010
$
$
757,753
316,776
-
9,241
Note
11
14
12b, 16a
6,020,738
6,437,921
6,778,491
6,763,938
23
23
24
14
4,069,262
946,011
17,937,930
11,931
22,965,134
5,949,891
703,034
21,491,672
-
28,144,597
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk consisting of interest rate risk and
foreign currency risk.
(a) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to
a financial loss to the Group.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems for the approval, granting and
renewal of credit limits, regular monitoring of exposures against such limits and monitoring of the financial stability of significant customers and
counterparties), ensuring to the extent possible, that customers and counterparties to transactions are of sound credit worthiness. Such monitoring is
used in assessing receivables for impairment. Depending on the division within the Group, credit terms are generally 30 to 45 days from the end of
month.
Credit Risk Exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any collateral or
other security held is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the statement
of financial position. Credit risk also arises through the provision of financial guarantees, as approved at Board level, given to parties securing the
liabilities of certain subsidiaries.
Collateral held by the Group securing receivables is detailed in Note 12.
The Group has no significant concentration of credit risk with any single counterparty or group of counterparties. Details with respect to credit risk of
Trade and Other Receivables is provided in Note 12.
Trade and other receivables that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as
detailed at Note 12.
Cash and cash equivalents
Note
11
Consolidated Group
2011
2010
$
$
757,753
757,753
316,776
316,776
(b)
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to
financial liabilities. The Group manages this risk through the following mechanisms:
• preparing forward looking cash flow analysis in relation to its operational, investing and financing activities;
• monitoring undrawn credit facilities;
• maintaining a reputable credit profile; and
• managing credit risk related to financial assets.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. The bank does however maintain the right to review the
facilities annually. The next annual review date is 31 July 2012. Financial guarantee liabilities are treated as payable on demand since the Group has
no control over the timing of any potential settlement of the liabilities.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual timing may therefore differ from that
disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect the earliest contractual settlement dates and do not reflect
management’s expectations that banking facilities will be rolled forward.
40
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 35
Financial Risk Management (continued)
Financial liability and financial asset maturity analysis
Within 1 Year
1 to 5 years
Over 5 years
Total
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
Consolidated Group
Financial liabilities due for payment
Bank overdrafts and
loans
Trade and other payables
(excl. est. annual leave)
Amounts payable to related
parties
Financial lease
liabilities
Total expected outflows
17,077,310
5,015,273
2011
$
Consolidated Group
Financial Assets - cash flows realisable
Cash and cash equivalents
Trade, term and loans
receivables
Forward exchange
contracts
Total anticipated inflows
(11,931)
6,766,560
6,020,738
757,753
18,555,765
6,652,925
-
-
-
-
-
-
139,750
1,523,040
496,082
22,588,665
711,064
25,919,754
224,788
364,538
701,803
2,224,843
Within 1 Year
1 to 5 years
Over 5 years
2010
$
2011
$
2010
$
2011
$
2010
$
316,776
6,437,921
9,241
6,763,938
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,077,310
18,555,765
5,015,273
6,652,925
139,750
1,523,040
720,870
22,953,203
1,412,867
28,144,597
Total
2011
$
2010
$
757,753
316,776
6,020,738
6,437,921
(11,931)
6,766,560
9,241
6,763,938
(16,186,643)
(21,380,659)
Net (outflow) / inflow on
financial instruments
(15,822,105)
(19,155,816)
(364,538)
(2,224,843)
Certain financial assets have been pledged as security for debt and their realisation into cash may be restricted subject to terms and conditions attached to
the relevant debt contracts. Refer to Note 24 for further details.
(c) Market Risk
(i)
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period whereby a future change in
interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
Interest rate risk is managed using a mix of fixed and floating rate debt.
(ii)
Foreign exchange risk
The board and senior management regularly monitor foreign currency movements and has undertaken to use hedging contracts where appropriate to
the value of up to 100% of it's US dollar requirements over a maximum 90-day period. The board reviews this regularly after consultation with market
advisors and it's bank.
Sensitivity Analysis
The following table illustrates sensitivities to the Group’s exposures to changes in interest rates, exchange rates and commodity and equity prices. The table
indicates the impact on how profit and equity values reported at balance date would have been affected by changes in the relevant risk variable that
management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables.
Year ended 30 June 2011
+/- 2% in interest rates
+/- 5% in $A/$US
Year ended 30 June 2010
+/- 2% in interest rates
+/- 5% in $A/$US
Consolidated Group
Profit
$
Equity
$
(355,964)
355,964
274,229
(274,229)
(399,373)
399,373
230,233
(230,233)
(355,964)
355,964
274,229
(274,229)
(399,373)
399,373
230,233
(230,233)
Increase
Decrease
Increase
Decrease
Increase
Decrease
Increase
Decrease
41
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 35
Financial Risk Management (continued)
Net Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities are presented in the following table and can be compared to their carrying values as presented in
the statement of financial position. Fair values are those amounts at which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where changes in assumptions may have a material impact on the
amounts estimated. Areas of judgment and the assumptions have been detailed below. Where possible, valuation information used to calculate fair value is
extracted from the market, with more reliable information available from markets that are actively traded. In this regard, fair values for listed securities are
obtained from quoted market bid prices. Where securities are unlisted and no market quotes are available, fair value is obtained using discounted cash flow
analysis and other valuation techniques commonly used by market participants.
Differences between fair values and carrying values of financial instruments with fixed interest rates are due to the change in discount rates being applied by
the market since their initial recognition by the Group. Most of these instruments which are carried at amortised cost (i.e. term receivables, held-to-maturity
assets, loan liabilities) are to be held until maturity and therefore the net fair value figures calculated bear little relevance to the Group.
Consolidated Group
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and advances - related parties
Derivatives - hedging
Investments in associated entities
Total financial assets
Financial liabilities
Trade and other payables
Hire purchase liabilities
Lease liabilities
Derivatives
Other related parties
Bank debt
Total financial liabilities
Note 36
Reserves
2011
2010
Net Carrying
Value
$
Net Fair Value
$
Net Carrying
Value
$
Net Fair Value
$
757,753
5,924,011
96,727
-
1,491,089
8,269,580
757,753
5,924,011
96,727
-
1,491,089
8,269,580
316,776
5,727,448
710,473
9,241
2,712,355
9,476,293
316,776
5,727,448
710,473
9,241
2,712,355
9,476,293
5,015,273
720,870
-
11,931
139,750
17,077,310
22,965,134
5,015,273
720,870
-
11,931
139,750
17,077,310
22,965,134
6,652,925
1,379,331
33,536
-
1,523,040
18,555,765
28,144,597
6,652,925
1,379,331
33,536
-
1,523,040
18,555,765
28,144,597
(a)
(b)
Asset Revaluation Reserve
The revaluation surplus records revaluations of non-current assets. Under certain circumstances dividends can be declared from this reserve.
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of a foreign controlled subsidiary.
(c) Option Reserve
The option reserve records items recognised as expenses on valuation of employee share options.
(d) Cash Flow Hedge Reserve
The hedge reserve records revaluations of items designated as hedges.
42
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011
Note 37
Restatement of prior year comparatives
Reclassification of amounts relating to discontinued operations
(a)
The prior year comparatives have been restated to reclassify amounts relating to operations which were discontinued during the year. In addition, revenue
previously disclosed as other income relating to scaffold hire has been reclassified as revenue due to the fact that it is earned in the normal course of
business.
The net effect of this adjustment on each of the line items affected is as follows:
Consolidated statement of financial performance at the end of the earliest comparative period
Revenue
Cost of sales
Gross profit
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Impairment expenses
Loss on remeasurement of equity investment due to business combination
Loss on revaluation of investment property
Finance costs
Share of net profits of associates
Loss before income tax
Income tax benefit (expense)
Loss from continuing operations
Loss for the year from discontinued operations after tax
Loss for the year
2010
$
Reported
$
Adjustment
2010
$
Restated
27,486,866
(25,907,619)
1,579,247
15,119,044
(13,772,700)
(1,053,478)
(1,549,928)
(2,724,755)
(3,115,637)
(516,000)
(812,553)
(1,683,629)
92,177
(8,438,212)
(189,043)
(8,627,255)
(22,993)
(8,650,248)
4,527,135
7,904,577
12,431,712
(14,130,572)
1,571,287
325,638
686,220
85,263
2,739,578
-
-
67,716
44,037
3,820,879
33,338
3,854,217
(3,854,217)
-
32,014,001
(18,003,042)
14,010,959
988,472
(12,201,413)
(727,840)
(863,708)
(2,639,492)
(376,059)
(516,000)
(812,553)
(1,615,913)
136,214
(4,617,333)
(155,705)
(4,773,038)
(3,877,210)
(8,650,248)
Correction of error in classification of borrowings
(b)
Non-current bank borrowings have been reclassified as current in the prior year due to a timing issue in relation to the renewal of the Group's finance
facilities and to ensure compliance with Australian Accounting Standards. Under AASB101 Presentation of Financial Statements , unless there is an
"unconditional right to defer settlement for at least twelve months after the reporting period", all borrowings must be disclosed as current in the statement of
financial position. As at 30 June 2010, the Group was in the process of renegotiating the terms of its finance facility and a formal offer had not yet been
received from the bank. As a result, this did not satisfy the requirements under AASB101 and the borrowings should have been classified as current in the
30 June 2010 financial report.
The net effect of this adjustment on each of the line items affected is as follows:
Consolidated statement of financial position at the end of the earliest comparative period
Current borrowings
Non-current borrowings
2010
$
Reported
$
Adjustment
2010
$
Restated
3,188,506
16,078,323
19,266,829
18,303,166
(16,078,323)
2,224,843
There was no impact on balances for the financial year ended 30 June 2009 and therefore a third balance sheet is not considered necessary.
Note 38
Company Details
The registered office of the company is:
Oldfields Holdings Limited
8 Farrow Road, Campbelltown, NSW, 2560
The principal place of business are:
Oldfields Holdings Limited
8 Farrow Road, Campbelltown, NSW, 2560
43
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
DIRECTORS’ DECLARATION
The directors of the company declare that:
1.
2.
the financial statements and notes, as set out on pages 8 to 43, are in accordance with the Corporations Act
2001 and:
(a)
comply with Accounting Standards, which, as stated in accounting policy note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2011 and of the performance for the year
ended on that date of the company and consolidated group;
(b)
the Chief Executive Officer and Chief Finance Officer have each declared that:
(a)
the financial records of the company for the financial year have been properly maintained in accordance
with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with Accounting Standards; and
the financial statements and notes for the financial year give a true and fair view; and
(b)
(c)
3.
in the directors' opinion there are reasonable grounds to believe that the company will be able to pay its debts
as and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors.
Director
Raymond John Titman
Dated this
20th
day of
September
2011
44
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF OLDFIELDS HOLDINGS LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Oldfields Holdings Limited, which comprises the
consolidated statement of financial position as at 30 June 2011, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies,
other explanatory information, and the directors’ declaration of the consolidated entity. The consolidated
entity comprises the company and the entities it controlled at the year’s end or from time to time during
the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity’s preparation
and fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act
2001.
Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au
PKF | ABN 83 236 985 726
Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia
The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the
PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast
Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
Opinion
In our opinion:
(a)
the financial report of Oldfields Holdings Limited is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011
and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b)
the consolidated financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 1.
Emphasis of Matter
We draw attention to Note 1 'Going Concern' of the financial report, which describes uncertainty related to
the consolidated entity's ability to continue as a going concern and therefore whether it will be able to pay
its debts as and when they fall due and realise its assets and extinguish its liabilities in the normal course
of business at the amounts stated in the financial report. The financial report does not include
adjustments relating to the recoverability and classification of liabilities that might be necessary should the
consolidated entity not continue as a going concern. Our opinion is not qualified in respect of this matter.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 5 of the directors’ report for the year
ended 30 June 2011. The directors of the company are responsible for the preparation and presentation
of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Oldfields Holdings Limited and controlled entities for the year
ended 30 June 2011, complies with section 300A of the Corporations Act 2001.
PKF
Paul Bull
Partner
20 September 2011
Sydney
OLDFIELDS HOLDINGS LIMITED ABN: 92 000 307 988
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following information is current as at 31 July 2011:
1.
Shareholding
a.
b.
c.
d.
Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Ordinary
71
86
31
93
43
324
Number
Redeemable
Nil
Nil
Nil
Nil
Nil
Nil
The number of shareholdings held in less than marketable parcels is nil.
The names of the substantial shareholders listed in the holding company’s register are:
Shareholder
Randell Management Services
Aymtold Properties Pty/UFBA
Lymgrange Pty Limited/Chris & Marilyn Hext/Hext Fam Inv/Nepean Car & Truck
Starball Pty Ltd/Man Investments/Chiara Mankarios
Ordinary
19,692,264
6,900,000
4,801,228
3,021,090
Preference
Nil
Nil
Nil
Nil
Number
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares
–
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by
proxy has one vote on a show of hands.
e.
20 Largest Shareholders — Ordinary Shares
Name
Randell Management Services
Aymtold Properties Pty/UFBA
Lymgrange Pty Limited/Chris & Marilyn Hext/Hext Fam Inv/Nepean Car & Truck
Starball Pty Ltd/Man Investments/Chiara Mankarios
Dixson Trust Pty Limited
Mr Warwick Every-Burns
Lost Ark Nominees Pty Limited
Mr Rodney Boyce Hass
Oceanridge Limited
Carryoak Pty Ltd
Locope Pty Ltd
Dr Gordon Bradley Elkington
Mr Christopher Michael Giles
Mr Paul John Simpson
Wingroad Pty Limited
Luton Pty Ltd
The Genuine Snake Oil Company
Mr Brian Garfield Benger
Mr Mark Sheffield Hancock
Sanperez Pty Ltd
Number of Ordinary
Fully Paid Shares
Held
19,692,264
6,900,000
4,801,228
3,021,090
2,000,000
1,500,000
1,400,000
1,326,082
1,202,544
1,200,000
751,500
701,228
700,000
700,000
689,657
679,887
527,560
520,000
500,000
500,000
49,313,040
% Held
of Issued
Ordinary Capital
35.3%
12.4%
8.6%
5.4%
3.6%
2.7%
2.5%
2.4%
2.2%
2.2%
1.3%
1.3%
1.3%
1.3%
1.2%
1.2%
0.9%
0.9%
0.9%
0.9%
88.5%
The name of the company secretary is Robert Allan Coleman.
The address of the principal registered office in Australia is 8 Farrow Road, Campbelltown NSW 2560.
Telephone (02) 4627 0777.
Registers of securities are held at the following address:
Boardroom Pty Limited. Level 7, 207 Kent Street, Sydney N
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities
Exchange Limited.
Unquoted Securities
Options over Unissued Shares
A total of 350,000 options are on issue. 350,000 options are on issue to two holders of ordinary securities.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
2.
3.
4.
5.
6.
47
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of Oldfields Holdings Limited is committed to high standards of corporate governance and adopts
wherever possible the principles outlined in the Corporate Governance Principles and Best Practice Recommendations with
2010 amendments, published by the ASX Corporate Governance Council.
The recommendations are written in a principles based fashion and individual boards are able to choose whether to follow
the recommended practices or to adopt other practices that are better suited to the individual circumstances of the Group.
Given the size and specific circumstances of Oldfields Holdings Limited the Board recognises that some of the best practice
recommendations are not suited to obtaining the best shareholder outcomes at the present time. This situation is monitored
by the Board and the recommendations will be adopted as and when the Group’s circumstances allow.
All relevant best practice recommendations of the ASX Corporate Governance Council have been applied for the financial
year ended 30 June 2011 unless specifically disclosed below. Where a recommended practice has not been followed a
detailed description of the practices adopted in its stead is provided together with a commentary on how the risks of non-
adoption of the recommended practice are mitigated.
Recommendation
Recommended Practice
Oldfields’ Practice
Recommendation 1.1 Establish functions reserved for the board and for
The recommended practice is adopted.
senior management.
Recommendation 1.2 Disclose the process for evaluation of senior
The recommended practice is adopted.
executives.
Recommendation 1.3
Provide information indicated in the Guide.
The indicated information is provided.
Recommendation 2.1 Majority of the Board should be independent
Directors.
Recommendation 2.2
The Chair should be an Independent Director.
Recommendation 2.3
The Chair and the CEO should not be the same
person.
Recommendation 2.4 The Board should establish a nominations
Committee.
Recommendation 2.5 Disclose
the process
the
performance of the Board, its committees and
individual directors.
Provide information indicated in the Guide.
for evaluation of
Recommendation 2.6
The majority of the Board is not independent
and
is
the
disclosed.
The recommended practice is adopted.
risk management process
The recommended practice is adopted.
Nominations are considered by the whole
board.
The process
formal
evaluation was undertaken in the reporting
period.
The indicated information is provided.
is disclosed. No
Recommendation 3.1
Establish and Disclose a Code of Conduct.
The recommended practice is adopted.
Recommendation 3.2
Establish a Diversity Policy.
Recommendation 3.3 Adopt measurable diversity targets.
Recommendation 3.4
Report on the proportion of women.
recommended
practice will
The
be
considered for adoption subsequent to year
end.
The
be
considered for adoption subsequent to year
end.
The recommended practice is adopted.
practice will
recommended
Recommendation 3.5
Provide information indicated in the Guide.
The recommended practice is adopted.
Recommendation 4.1
The Board should establish an Audit Committee.
The recommended practice is adopted.
Recommendation 4.2 The audit committee should be structured to:
• consist only of non-executive directors;
• consist of a majority of independent directors;
• be chaired by an independent chair, who is not
chair of the board; and
The committee has only two members, one of
whom is not independent, and is chaired by
the Chairperson of the Board.
Recommendation 4.3
• have at least three members.
The audit committee should have a formal charter. The recommended practice is adopted.
Recommendation 4.4
Provide the information indicated in the Guide.
The information is disclosed.
Recommendation 5.1 Establish written policies designed to ensure
compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a
The recommended practice is adopted. The
policy is disclosed.
48
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Recommendation
Recommended Practice
Oldfields’ Practice
Recommendation 5.2
senior executive level for that compliance and
disclose those policies or a summary of those
policies.
Provide the information indicated in the Guide.
Recommendation 6.1 Design a communications policy for promoting
effective communication with shareholders and
their participation at general
encouraging
meetings and disclose their policy or a summary
of that policy.
Provide the information indicated in the Guide.
Recommendation 6.2
Recommendation 7.1 Establish policies
the oversight and
management of material business risks and
disclose a summary of those policies.
for
Recommendation 7.2 The board should require management to design
and implement the risk management and internal
control system to manage the Group's material
business risks and report to it on whether those
risks are being managed effectively. The board
should disclose that management has reported to
the Group's
it as
management of its material business risks.
the effectiveness of
to
Recommendation 7.3 Companies should establish policies
the
oversight and management of material business
risks and disclose a summary of those policies.
Provide the information indicated in the Guide.
for
Recommendation 7.4
The information is provided.
The recommended practice is adopted. The
policy is disclosed.
The recommended practice is adopted.
The recommended practice is adopted. The
Risk Management Statement is disclosed.
The recommended practice is adopted.
The recommended practice is adopted.
The indicated information is provided.
Recommendation 8.1 The board should establish a
committee.
remuneration
The recommended practice is adopted.
Recommendation 8.2 The remuneration committee should be structured
so that it:
• consists of a majority of independent directors
•
• has at least three members.
is chaired by an independent chair
Recommendation 8.3 Companies should clearly distinguish the structure
of non-executive directors’ remuneration from that
of executive directors and senior executives.
Provide the information indicated in the Guide.
Recommendation 8.4
The committee does not have a majority of
the
independent directors,
is an
Chairperson of
independent director and has only
two
members.
The recommended practice is adopted.
the Board who
is chaired by
The indicated information is provided.
Up-to-date information is available on the Group’s website which contains a clearly marked corporate governance section.
49
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Principle 1. LAY SOLID FOUNDATIONS FOR MANAGEMENT & OVERSIGHT
Recommendation 1.1 – Establish functions reserved for the Board and for Senior Management and disclose those
functions.
The Board of Directors are accountable to the shareholders for the performance of the Group. The Board sets the strategic
direction and delegate’s responsibility for the management of the Group to the Chief Executive Officer.
A copy of the Board Charter, which promotes a culture within the Group of accountability, integrity and transparency, is
available from the Group’s website.
Each Board member must, at all times, act honestly, fairly and diligently in all respects in accordance with the Group’s Code
of Conduct and all laws that apply to the Group.
Key matters reserved for the Board include:
•
•
•
•
•
•
•
•
Oversight of the Group, including its control, accountability and compliance systems;
Appointment, monitoring, managing performance and if necessary removal of the Chief Executive Officer, Chief
Financial Officer and Company Secretary;
Input, assessment, appraisal and final approval of management’s development of corporate strategy and
performance objectives;
Monitoring risk management;
Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and
divestitures;
Approval and monitoring financial and other reporting;
Ensuring the market and shareholders are fully informed of material developments; and
Recognising the legitimate interests of stakeholders.
The expectations of Directors are outlined in a formal Letter of Appointment which details the term of appointment, fees,
power and duties and other information pertinent to their roles.
Responsibility for the day-to-day management of the Group and its operations is delegated to senior executive
management. The expectations of senior executive management are outlined in Board decisions which are communicated
to the Chief Executive Officer and recorded in the Board Minutes and also in the position descriptions and KPI’s for each
senior executive role.
The Board holds a minimum of six formal meetings a year, but usually ten. Additional meetings are held as required.
Details of current members of the Board are disclosed in the Directors’ Report.
Recommendation 1.2 – Disclose the process for evaluation of senior executives.
Senior executive management are evaluated each year on their performance against stated objectives, goals and key
performance indicators (KPI’s).
Overall performance is reviewed by the particular senior executive’s direct supervisor and ultimately by the Chief Executive
Officer and/or Board of Directors.
Recommendation 1.3 – Provide information indicated in the Guide to reporting on Principle 1.
•
•
There are no departures from Recommendations 1.1, 1.2 or 1.3;
Senior executive performance evaluations have taken place during the reporting period as detailed in
Recommendation 1.2.
50
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Principle 2. STRUCTURE THE BOARD TO ADD VALUE
The Board currently has four directors, comprising two non-executive directors, including the chairperson, and two
executive directors.
The Board has adopted the following principles:
•
•
•
The same individual should not exercise the roles of chairperson and chief executive officer;
The Board should not comprise a majority of executive directors; and
The Board should comprise persons with a broad range of skills and experience appropriate to the needs of the
Group.
Recommendation 2.1 – Majority of the Board should be independent directors.
Independent directors are those who are independent of management and free of any business or other relationship that
could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered
and independent judgment.
In assessing the independence of directors, an independent director is a non-executive director and:
•
•
•
•
Is not a substantial shareholder, as defined in section 9 of the Corporations Act, of the Group or an officer of, or
otherwise associated directly with, a substantial shareholder of the Group;
Has not within the last three years been employed in an executive capacity by the Group or another group member,
and there has not been a period of at least three years between ceasing such employment and serving on the
Board;
Has not within the last three years been a principal of a material professional advisor or a material consultant to the
Group or another group member, or an employee materially associated with the service provided; and
Is not a material supplier or customer of the Group or other group member, or an officer of or otherwise associated
directly or indirectly with a material supplier or customer;
At the date of this report only the Chairperson is an independent director.
The following directors do not meet the independence criteria listed above:
•
•
•
•
William Lewis Timms: appointed 18th December 2009, currently a non-executive director and substantial
shareholder;
Christopher Charles Hext: appointed 29th June 2001, resigned 8th July 2011, formerly a non-executive director and
substantial shareholder;
Christopher Giles: appointed 24th September 2010, currently an executive director; and
Ray Titman: appointed 23rd July 2010, currently an executive director.
The board manages the risk of having a majority of non-independent directors through the provision of a well-qualified
independent Chairperson, restrictions on trading in shares, restrictions on related party transactions, a close relationship
with the principal provider of debt funding and a strong independent audit with a focus on controls.
Recommendation 2.2 – The Chair should be an Independent Director.
The current Chair, Julie Garland McLellan is an independent director.
Recommendation 2.3 – The Chair and the CEO should not be the same person.
The duties and responsibilities of the Chair and Chief Executive Officer are separate and each position is held by a different
individual.
Recommendation 2.4 – The Board should establish a Nomination Committee.
Given the size and requirements of the Group, the Board has decided that a nomination committee is not required at this
point in time. At present all members of the Board consider the composition of the Board and appointment of new directors.
Recommendation 2.5 – Disclose the process for evaluation of the performance of the Board, its committees and individual
directors.
The Board has undergone a significant change in composition during the reporting period and has not completed a formal
evaluation process within that period. A formal evaluation will be undertaken as a matter of course in 2012. The
Chairperson performs an informal evaluation of individual directors and also of each board meeting.
During the course of the year the following meetings were held and attended:
51
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Director
Julie Garland McLellan
Christopher Charles Hext
William Lewis Timms
Raymond John Titman
Christopher Michael Giles
Eligible
to Attend
4
12
12
12
10
Meetings
Attended
4
10
12
12
10
Information is supplied to the Board in advance of the scheduled board meetings so that each director may make
independent assessment of the data and the Board as a whole may discharge its duties effectively. Directors are entitled to
seek additional information where considered necessary to make informed decisions.
The Company Secretary supports the Board in coordinating the timely completion and dispatch of the board agenda and
board papers. The appointment and removal of the Company Secretary is governed by the Board as a whole.
Recommendation 2.6 – Provide information recommended in the Guide on Principal 2.
•
•
•
•
•
•
•
•
The skills, experience and relevant position of each director are detailed in the Directors’ Report;
The names of the independent and non-executive directors and the materiality threshold are discussed in
Recommendation 2.1;
Any relationships between a Director and the Group which may affect independence are stated in Recommendation
2.1;
The Group acknowledges directors require high quality information and advice on which to base their decisions and
considerations. All directors have the right to seek advice and clarification from the Group’s auditors, financial and
legal advisors on any matter relating to the performance of the Group or the Board;
Directors additionally have the right to seek independent professional advice to help them carry out their
responsibilities. Expenses will need to be approved in advance by the Chairperson. If the Chairperson is unable or
unwilling to give approval, then board approval will be sufficient. Any costs incurred will be borne by the Group;
The period of office held by each director in office at the date of the Annual Report is disclosed in the Directors’
Report;
A performance review as disclosed in Recommendation 2.5 was performed during the reporting period; and
Any departures from recommendations relating to Principal 2 have been disclosed in the discussion of the relevant
recommendation.
Principle 3. PROMOTE ETHICAL AND RESPONSIBLE DECISION – MAKING
Recommendation 3.1 – Establish and Disclose a Code of Conduct and disclose the code or a summary of the code as to
the practices necessary to maintain confidence in the company’s integrity, the practices necessary to take into account their
legal obligations and the reasonable expectations of their stakeholders and the responsibility and accountability of individu-
als for reporting and investigating reports of unethical practices.
The Board has a code of conduct for directors and Group officers and employees. The key elements of the code are:
•
•
•
•
•
•
•
Conflicts of interest;
Corporate opportunities;
Confidentiality;
Fair dealing;
Protection of assets;
Compliance with laws and regulations; and
Promotion of ethical and lawful behavior.
Recommendation 3.2 – Establish a Diversity Policy and disclose the policy or a summary of that policy. The policy should
include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess
annually both the objectives and progress in achieving them.
Subsequent to the end of the reporting period the Board will consider adopting a Diversity Policy. The policy would include
requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess
annually both the objectives and progress in achieving them.
Recommendation 3.3 –Disclose in each annual report the measurable objectives for achieving gender diversity set by the
board in accordance with the diversity policy and progress towards achieving them.
The policy will be considered subsequent to year end, and if adopted, the objectives relating to the following year will be
disclosed in that report.
52
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Recommendation 3.4 –Disclose in each annual report the proportion of women employees in the whole organisation,
women in senior executive positions and women on the board.
The current proportion of women as at 30 June 2011 is:
Board
Corporate
Paint Applications
Treco Garden Sheds
Scaffolding
Scaffolding - China
Total
No. of
Women
1
17
7
2
6
8
41
No. of
Men
3
6
15
14
64
21
123
% of
Women
25
74
32
13
9
28
25
Recommendation 3.5 - Provide information recommended in the Guide on Principal 3.
A copy of the Code of Conduct can be obtained from the Corporate Governance section of the Group’s website.
Principle 4. THE BOARD SAFEGUARDS THE INTEGRITY OF FINANCIAL REPORTING
The Chief Executive Officer and the Chief Financial Officer state, in writing, to the Board that the Group’s financial reports
present a true and fair view, in all material respects, of the Group’s financial position and operational results and are in
accordance with relevant accounting standards.
Recommendation 4.1 – the Board should establish an Audit Committee.
The Board has an Audit Committee, which:
•
•
•
Has two members who are non-executive directors;
Has a written charter which can be obtained from the Corporate Governance section of the Group’s website; and
Includes members who are all financially literate.
Details of the members are disclosed in the Director’s Report.
The Board recognises that an independent audit committee is an important feature of good corporate governance.
Recommendation 4.2 – The audit committee should be structured so that it consists only of non-executive directors,
consists of a majority of independent directors, is chaired by an independent chair, who is not chair of the board, and has at
least three members.
The Audit Committee:
•
•
•
Consists only of non-executive directors, however all directors are entitled to receive the papers of the committee
and to attend meetings of the committee and to meet with the auditors;
Is chaired by an independent chairperson. It is recommended that the Chairperson of the Audit Committee is not the
Chairperson of the Board. In the case of Oldfields Holdings Limited, there are only two non-executive directors on
the Board. One is Chairperson of the Board and resides in Sydney and the other is a substantial shareholder and
resides in Perth. The Board has determined that given the need for the Chairperson of the Audit Committee to work
closely with the auditors, it is more appropriate for the most independent and locally residing director to take this role.
The Board reviews committee composition as changes to the Board occur and will review this arrangement at such
times in the future.
Has two members. Given the size and structure of the Board, as discussed in Recommendation 2.1, the Board feels
that two members both of whom are financially literate, is sufficient at this time.
The risk with a small committee is that the members will lack the diversity to raise and recognise issues. The risk with
having the Chairperson of the Board being Chairperson of the audit committee is that there is a lack of independent
oversight due to the concentration of power and information in one person. This risk is managed through specific working
arrangements with the auditors having access to the full board at any time upon their request and through ensuring that the
Chairperson of the Board and audit committee is a well-qualified independent director. It is intended to review this
arrangement and adopt the recommended practice if and when the board composition changes.
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OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Recommendation 4.3 – Audit Committee should have a formal charter.
The Audit Committee has a formal charter, the key elements of the Charter are:
•
•
•
•
•
•
•
Role of the Committee;
Membership;
Meetings;
Responsibilities;
Authority;
Independence; and
Non-audit work.
The Board and Audit Committee closely monitor the independence of the external auditor. The Audit Committee meets a
minimum of twice a year. The committee also meets in private, with management without the external auditor and, at a
separate time, with the external auditor without management.
Recommendation 4.4 - Provide information recommended in the Guide on Principal 4.
The members of the Audit Committee are:
•
•
Julie Garland McLellan (Chairperson); and
William Lewis Timms.
The details of the qualifications of the Audit Committee members are disclosed in the Directors’ Report.
The details of the number of Audit Committee meetings held are contained in the Directors’ Report.
Departures from recommendations included in Principle 4 have been disclosed in the discussion of the relevant
recommendations.
Principle 5. THE BOARD MAKES TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1 – Establish policy on ASX Listing Rule disclosure requirements and ensure accountability at a senior
executive level for that compliance and disclose those policies or a summary of those policies.
The Group has established procedures to ensure compliance with ASX Listing Rules which require that when an entity
becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the
price or value of the entity’s securities, the entity must immediately tell ASX that information.
A Continuous Disclosure Policy and Procedure has been prepared and is available from the Corporate Governance section
of the Group’s website.
Recommendation 5.2 - Provide information recommended in the Guide on Principal 5.
The information is provided above.
Principle 6. RESPECT THE RIGHTS OF SHAREHOLDERS
Recommendation 6.1 – Companies should design a communications policy for promoting effective communication with
shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.
The Group has developed and implemented a shareholder communication strategy. The Group promotes effective
communication with shareholders and encourages effective participation at the Group’s general meetings.
Shareholders and other parties will be able to access the following information from the Group’s website:
•
•
•
•
Copies of all announcements given to the ASX;
Press releases and copies of letters to shareholders;
Copies of annual and half year financial reports; and
Details of notices of shareholders meetings including information on general meetings.
The requirements of continuous disclosure ensure that the Group discloses relevant information to the shareholders and the
market in a timely and full manner.
Recommendation 6.2: Companies should provide the information indicated in the Guide to reporting on Principle 6.
The Shareholder Communication Strategy is available on the Oldfields website.
54
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Principle 7. RECOGNISE AND MANAGE RISK
Recommendation 7.1 – Companies should establish policies for the oversight and management of material business risks
and disclose a summary of those policies.
The Board recognises that there are a number of complex operational, commercial, financial and legal risks and has in
place procedures to safeguard the Group’s assets and interests.
An Occupational Health and Safety Committee has been established to monitor and recommend changes to safe working
practices and a safe working environment. The chairperson is not a director, and the committee comprises the managing
director, senior executive officers and employee representatives.
The Board has developed a risk management policy the purpose of which is:
•
•
•
•
•
•
•
Identify, access, monitor and manage risk;
Inform investors of material changes to the Group’s risk profile;
Enhance the environment for capitalising on value creation opportunities;
Ensure compliance with the Corporations Act;
Consider the reasonable expectations of its stakeholders;
The measures and procedures in place to comply with these regulations; and
How compliance with those measures and procedures will be monitored.
A summary of these policies is contained in the Risk Management Statement which is disclosed on the Oldfields website.
Recommendation 7.2 – The board should require management to design and implement the risk management and internal
control system to manage the Group's material business risks and report to it on whether those risks are being managed
effectively. The board should disclose that management has reported to it as to the effectiveness of the Group's
management of its material business risks.
The Group’s risk management policy is designed and implemented by the Board of Directors’ which meet regularly to
identify all major risks, ensure appropriate risk management plans are in place and to monitor the effectiveness of the
implementation of the risk management plans.
The Chief Executive Officer and the Chief Financial Officer are required to state in writing to the board that the Group’s risk
management and internal compliance and control system is operating effectively and efficiently in all material aspects.
In March 2011 the Board changed its formal reporting requirement such that each line of business and the corporate head
office are required to disclose to the board at each regular meeting a statement regarding the level and nature of the key
risks facing the business.
Recommendation 7.3 – The Board should disclose whether it has received assurance from the Chief Executive Officer (or
equivalent) and the Chief Financial Officer (or equivalent) that the declaration provided in accordance with section 295A of
the Corporations Act is founded on a sound system of risk management and internal control and that the system is
operating effectively in all material respects in relation to financial reporting risks.
Written declarations are provided each year by the CEO, Chief Financial Officer and Company Secretary to the Board,
stating that the Group’s financial reports are based on a sound system of risk oversight and management and internal
control. These statements are discussed by the board with the auditor.
Recommendation 7.4 - Provide information recommended in the Guide on Principal 7.
•
•
•
The Board has received written declarations under Recommendation 7.2;
The Board has received written declarations under Recommendation 7.3;
The risk Management Policy is available on the Group website.
55
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
CORPORATE GOVERNANCE STATEMENT
Principle 8. REMUNERATE FAIRLY AND RESPONSIBLY
Recommendation 8.1 – The board should establish a remuneration committee.
The Board has established a remuneration committee. The Remuneration Committee is responsible for developing and
recommending to the Board:
•
•
•
•
•
•
•
Remuneration policies for Non-Executive Directors;
Remuneration policies for the Chief Executive Officer and Chief Financial Officer;
Remuneration policies for executive management;
All aspects of any executive share option or acquisition scheme;
Superannuation policies;
Policies which motivate senior executives to pursue the long term growth and success of the Group; and
Policies which show a clear relationship between senior executives’ performance and remuneration.
Recommendation 8.2 – The remuneration committee should be structured so that it consists of a majority of independent
directors, is chaired by an independent chair, and has at least three members.
The Board has a Remuneration Committee which has two members and a documented charter. The members and
qualification of the Remuneration Committee are disclosed in the Directors’ Report.
Due to the size and nature of the Board as discussed in recommendation 2.1 the following items of recommendation 8.1 are
not followed:
•
•
consists of a majority of independent directors; and
has at least three members.
The remuneration of Non-Executive Directors is by way of director’s fees in the form of cash, non-cash benefits and
superannuation benefits.
The total annual remuneration paid to Non-Executive Directors may not exceed the limit set by shareholders at the annual
general meeting.
Non-Executive Directors do not receive options unless approved by shareholders.
Recommendation 8.3 - Companies should clearly distinguish the structure of non-executive directors’ remuneration from
that of executive directors and senior executives.
The Group has clearly differentiated the remuneration structure of executive and non-executive directors. The key elements
of the remuneration philosophy are disclosed in the Remuneration Committee Charter which is available on the Oldfields
website.
Recommendation 8.4: Companies should provide the information indicated in the Guide to reporting on Principle 8.
•
•
•
•
The members of the Remuneration Committee and their attendance at meetings are disclosed in the Directors’
Report;
Non-Executive Directors are not provided with retirement benefits other than superannuation;
A copy of the Remuneration Committee Charter can be obtained from the Group’s web site; and
Departures from recommendations included in Principle 8 have been disclosed in the discussion of the relevant
recommendations.
56
OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
RISK MANAGEMENT STATEMENT
1. Introduction
This statement provides an overview of the Group's risk management policies and internal compliance and control
systems in accordance with Principle 7 of the ASX Principles of Good Corporate Governance.
2. Responsibility
The Board of Directors are responsible for oversight on a regular basis of the Group's procedures and risk management
policies. The responsibility of the Board is codified under the Board Charter, which is available on the Group’s website.
The Group also has an Audit Committee, the responsibilities of which are documented in the Audit Committee Charter
which is also available on the Group’s website.
3. Risk Management Monitoring
The Board has implemented a combination of internal policies and procedures and use of external audits to monitor risk
management and its effectiveness.
3.1. Standard Operating Procedures (SOP's)
The Board has implemented risk management policies covering areas of business risk such as:
•
•
•
•
•
Occupational Health and Safety;
Finance and Treasury;
Human Resources;
Asset Protection (insurance); and
Codes of Conduct.
The Policies referred to are regularly reviewed and an internal mechanism exists whereby the Board and committee
members have access to these reports on an internal intranet site. The Board manages these risks appropriately with
reference to identification, implementation and review of these risks and procedures.
3.2. External Audits
The external audit of the Group is conducted annually. There is also a formal review at least once every year. Both the
audit and review are conducted by an external auditor.
The Group has an Occupational Health and Safety Committee which has received training and certification by external
OH&S providers.
The Group engages with qualified external advisors annually in relation to asset protection. Where possible the Board
adopts the most practical and affordable insurance policies suitable to protect major assets of the Group.
In general an external qualified auditor and or valuers are engaged by the Board in determining large asset values on
acquisition of assets. An external valuation is obtained to determine and verify carrying values of investment property by
an external independent registered property valuer at least every three years.
3.3. Risk Management Statements
The integrity of the Group's financial reports relies on sound business and risk control systems.
Annually, the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) and Group Financial Controller are
required to sign a Risk Management Statement that is provided to the Audit Committee in writing.
The CEO and CFO sign a statement regarding the adequacy of financial controls in accordance with section 295a of the
Corporations Act 2001.
The Board requires management to report on the key business risks for each area of the business at each Board
meeting.
3.4 Internal Audit
Given the Group's size, an internal auditor is not practical. In addition the presence of executive directors on the Board
allows for detailed oversight of risks within each business by managers who are familiar with the risk environment but not
directly involved in the management of that particular business.
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OLDFIELDS HOLDINGS LIMITED AND CONTROLLED ENTITIES
ABN 02 000 307 988
RISK MANAGEMENT STATEMENT
3.5 External Covenants
The Group has voluntarily associated itself with the following self-regulated authorities:
•
•
EOWA (Equal Opportunity for Women in the Workplace Act): The Group reports annually on targets and policy to
an external agency in regards to Equal Opportunity Guidelines and Policy within the work force. The Board receives
and reviews this annually; and
Australian Packaging Covenant: The Group sets targets to reduce packaging waste and environmental impact of
packaging waste. Targets are set and guidelines adopted and where possible administered by management. The
Board reviews these targets annually.
The Group has also entered into an agreement with its principal lender (Westpac Banking Corporation) which provides
external overview of financial risks by a representative of the Bank.
4. Formal Risk Management Practices
The Group operates a formal process for risk management which includes:
•
•
•
•
•
•
Risk Identification;
Risk Analysis;
Risk Evaluation;
Risk Mitigation;
Risk Monitoring and Reporting; and
Risk Communication.
The risk management process meets appropriate professional standards and is reviewed annually by the Board of
Directors. The process meets, but is not limited to the requirements of Principle 7 of the ASX Principles for Good
Corporate Governance.
5. Risk Reporting and Communication
Risks are reported and their monitoring and management are communicated in accordance with the diagram below:
Material Risks
General Reporting
Accountabilities
risk
Direct
material risk
response or accept
Review and approve risk mitigation
strategies or accept risk
Oversight of framework and sufficiency
of reporting
Board of Directors
Implement risk response or escalate to
board of directors
Review and approve risk reporting and
mitigation strategies
Oversight of corporate
adequacy of framework
risks and
Chief Executive Officer (CEO)
Recommend material risk escalation to
CEO or Board of Directors
Consolidate
prepare summary reporting
risk assessments and
Implement
framework and ERM system
and monitor
ERM
Chief Financial Officer (CFO)
Identify and report material risks as
they arise
assessments
Prepare
accordance with ERM framework
risk
in
Operationally manage
escalate issues
risks and
Finance Department
Communication
Effective risk management is reliant on the timely and open communication of actual or potential risk events across the
organisation. Free and frank communication is at the heart of the Group's risk management approach, and where the
processes and accountabilities described in these standards may not support a suitably rapid response to any risk, then
communication should be undertaken using whatever means achieve the best outcome for the Group.
For the avoidance of doubt, Oldfields Holdings Limited has a policy of ‘not shooting the messenger’ and encourages all
staff to report risks of which they are aware.
58